ADAHI INC: U.S. Trustee Meets Creditors on Oct. 25-------------------------------------------------- The U.S. Trustee for Region 17 will convene a meeting of Adahi Inc.'s creditors at 2:00 p.m. on October 25, 2004, at 300 Booth Street, Room 2110 in Reno, Nevada. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases.

All creditors are invited, but not required, to attend. This Meeting of Creditors offers the opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors.

Headquartered in Incline Village, Nevada, Adahi Inc. filed for chapter 11 protection on September 13, 2004 (Bankr. D. Nev. Case No. 04-52718). Stephen R. Harris, Esq., at Belding, Harris & Petroni, Ltd., represents the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it estimated more than $10 million in debts and assets.

AES CORP: Improving Credit Matrix Cues S&P to Affirm Low-B Ratings------------------------------------------------------------------Standard & Poor's Ratings Services revised its outlook on The AES Corp. (AES; B+/Positive/--) to positive from stable following a periodic review of the Arlington, Virginia-based company. At the same time Standard & Poor's affirmed its 'B+' corporate credit rating on AES, its 'BB' rating on AES's senior secured exchange notes, its 'B-' rating on AES's senior unsecured and subordinated debt, and its 'CCC+' rating on AES's preferred stock.

The outlook revision reflects a trend of improving credit metrics both at the parent level and on a consolidated basis over the past year -- a trend that Standard & Poor's expects to continue based on management's public statements regarding its goals for debt reduction, and Standard & Poor's expectations of future portfolio performance.

A positive outlook means that Standard & Poor's expects that the rating is more likely to improve than to deteriorate or remain the same over a one-to-three-year time horizon. "Standard & Poor's believes that AES will maintain or improve the cash flow quality of its portfolio, and that it will be able to reduce parent level debt to about $4.5 billion over the next 18 to 24 months," said credit analyst Scott Taylor. "If the company can accomplish this while maintaining its target liquidity of $400 million to $600 million, Standard & Poor's is likely to upgrade the company to 'BB-'".

The rating on AES reflects the risks of its reliance on substantive distributions from jurisdictions where considerable regulatory and operating uncertainties exist to support its parent-level debt, some exposure to merchant power markets, and a highly leveraged, though improving, balance sheet. These risks are tempered by the diversification of AES's portfolio, a stable base of cash flow coming from its contractual generation businesses and its regulated utility, Indianapolis Power & Light Co., and a history of strong operations at its generation and distribution businesses.

AES's management team has demonstrated a commitment to restoring the company's credit quality, and moved it away from a strategy of aggressive expansion toward a focus on its core competency of operations. AES will need to invest in new businesses to maintain and grow its dividend stream, and the positive outlook is predicated on such investments being credit neutral or enhancing.

ALLIED WASTE: S&P Puts Stable Outlook on BB Corp. Credit Rating---------------------------------------------------------------Standard & Poor's Ratings Services revised its outlook on Allied Waste Industries, Inc., to stable from positive. At the same time, Standard & Poor's affirmed its ratings, including the 'BB' corporate credit rating, on the company. About $8 billion of debt is outstanding.

"The outlook revision is based on reduced earnings and cash flow prospects for 2004, stemming primarily from lower-than-expected results in the higher-margin landfill business and increased fleet repair and maintenance costs, which more than offset gains in lower-margin services, including collection," said Standard & Poor's credit analyst Roman Szuper.

"As a result, progress in debt reduction and a consequent improvement to key credit protection measures will now be more modest and gradual than anticipated earlier."

The ratings on Scottsdale, Arizona-based Allied Waste reflect a below-average financial profile, which outweighs the firm's strong competitive business position.

Allied Waste is the second-largest solid waste management participant in the U.S., with 2004 revenues and EBITDA estimated at about $5.4 billion and $1.47 billion-$1.5 billion, respectively. The company provides collection, transfer, disposal, and recycling services to about 10 million residential, commercial, and industrial customers in 37 states. A national network of facilities creates opportunities for modest growth through internal development, focusing on the vertical integration business model.

Efficient operations are enhanced by:

* leading shares in most local markets, * a low-cost structure, * good collection-route density, and * a high rate of waste internalization.

Allied Waste's below-average financial profile stems mainly from high debt levels incurred in the 1999 acquisition of Browning-Ferris Industries Inc. Debt reduction was accelerated in 2003 and 2004 from the issuance of common equity and mandatory convertible preferred stock, the proceeds from divestitures, and free cash flow. Moreover, in December 2003, $1.3 billion of preferred stock was converted into common stock, which strengthened the capital structure and saved about $500 million in cash over the next six years by eliminating future dividends. In the intermediate term, debt to EBITDA should improve somewhat to 4.5x-5x, EBITDA interest coverage to 2.5x-3x, and debt to capital to 70%-75%. Additional strengthening is expected longer term.

ASIA PULP: Indonesian Court Invalidates $550M Bond Issue--------------------------------------------------------In a decision that undermines the legitimacy of Asia Pulp and Paper's exchange offers, the District Court of Kuala Tungkal, Indonesia has invalidated over $550 million in bonds sold in 1995 by APP International Finance Company B.V., and unconditionally guaranteed by P.T. Lontar Papyrus Pulp & Paper Industry and Asia Pulp & Paper Company Ltd. Although it did not dispute receiving the funds, Lontar claimed the bond issuance was a "deceptive scheme" perpetrated by the indenture trustee, collateral agent, underwriter and depositary to generate fees.

The court found that the basic structure of the bond issuance, a structure commonly used for an offshore bond issuance, and the collateral security for the bonds are invalid under Indonesian law. The bonds were issued under the laws of New York, registered with the United States Securities and Exchange Commission and underwritten by Morgan Stanley. At the time of the issuance, the law firms representing the issuer, including White & Case and Tumbuan Pane, provided legal opinions confirming the validity of the bond issuance.

APP defaulted on $13.9 billion of debt in 2001. Bonds with virtually the same structure are being offered by the APP group in exchange for defaulted Indonesian operating company debt as part of APP's exchange offers launched in June of this year. "The biggest victims may be the bondholders who have accepted the exchange offers recently made by APP subsidiaries, Indah Kiat, Tjiwi Kimia and Pindo Deli. The new bonds offered in these exchanges, as highlighted in the risk disclosure section of the exchange offer documents, utilize the same invalidated structure. As such, they can be assumed to be invalid from the start and have little hope of being enforced in Indonesia," said Robert L. Rauch, Managing Director and Director of Research for Gramercy Advisors, LLC (Gramercy).

The Indonesian ruling, already under appeal, was not unexpected given the fact that several prominent Indonesian corporate debtors, including APP, have in the last two years started to use the local legal system to sue their creditors and nullify international financings. According to the ruling, Lontar and APP do not need to repay to bondholders the $550 million borrowed nor accrued interest. All defendants, other than GE Capital, were found to have contravened Indonesian law by participating in the bond issuance. Named defendants include the indenture trustee, the collateral agent, The Depository Trust Company (as bond instrument depositary), Morgan Stanley (as underwriter) and bondholders GE Capital, Oaktree Capital Management, LLC (Oaktree) and Gramercy. GE Capital sold its bonds after the commencement of the lawsuits in Indonesia. Pending the appeal process (which could take years) under Indonesian law, the Indonesian judgment is not effective or enforceable.

Earlier this year, bondholders Oaktree and Gramercy were awarded a judgment by the New York Supreme Court of over $350 million against APP, Lontar and affiliates based on defaulted bonds. In recent developments, the bondholders have taken actions to enforce their judgment throughout the United States and abroad, restraining property such as cash and equipment. In New York, for example, the creditors recently filed a motion to have the court enforce restraining notices served on Indah Kiat prohibiting it from dissipating any of its assets, including through any proposed exchange offer. The creditors are seeking to have the court direct key parties to the exchange offer to cease and desist from any participation in the exchange offer.

The bondholders also filed a turnover proceeding in New York, seeking to have the court direct APP to turn over all of its assets to the creditors until the judgment is satisfied. Those assets would include not only cash and other property, but also the stock of APP's United States-based operating affiliates, APP Trading (U.S.A.), APP U.S.A., Linden Trading Co., and PAK 2000. The creditors have won numerous examination orders allowing them to examine current and former employees in the APP group, as well as trading partners of those entities, in order to determine the location of APP assets for further seizure by the creditors.

"What has become clear during the course of the negotiations of APP's debt restructuring is that APP has no interest in pursuing a restructuring that conforms to international norms. It has refused to even have a dialogue with its secured creditors who simply ask that they be recognized in the restructuring as secured creditors with a higher priority claim than unsecured creditors. Instead of discussing these issues, APP chose to try to invalidate entire series of secured bonds with these frivolous lawsuits in Indonesia," said Melissa Obegi, Associate General Counsel for Oaktree.

"While we would always prefer to negotiate, we have been left with no other option but to pursue our legal rights as secured creditors and, now, as judgment creditors. Our $350 million judgment, issued by the New York court with jurisdiction over the bonds, entitles us to pursue APP's assets wherever we can find them, and we have been finding them. This recent irrational judgment issued by a court in Indonesia lacking jurisdiction will have no effect on our ability to enforce our New York judgment in countries with legal systems that respect the rule of law. Unless APP chooses to retreat from global commerce entirely, as long as our judgment remains unsatisfied, they will have to deal with us," finished Obegi.

Mr. Rauch continued: "As much as APP gives lip-service to it, there is no 'consensual' restructuring. APP negotiated a deal with a handpicked group of creditors that do not represent the interests of all of their creditors. Now APP is trying to force the same deal on the majority of its creditors, using heavy-handed threats that they will try to invalidate SEC-registered bonds of anyone who disagrees. Although APP continues to try to characterize the legitimate legal actions of certain of its secured creditors as merely a 'flagrant abuse of position,' APP's unwillingness to engage in discussions respecting international norms for consensual restructurings is purely an attempt by the controlling shareholders to profit unjustly at the expense of its creditors. Unfortunately, this strategy is likely to preclude a normalization of APP group operations to the detriment of all other stakeholders, potentially for years to come."

About the Company

Asia Pulp and Paper Company Ltd. is a vertically integrated pulp and paper producer in Asia (except Japan) and throughout the world. The Company produces a variety of printing and writing paper including coated and uncoated freesheets, cut-sized photocopier paper, stationery, carbonless paper, and a range of tissue paper products.

The rating action reflects the further deterioration in credit quality of the underlying collateral pool. Moody's noted that as of the August Monthly Report distributed by the trustee, the Issuer remains in violation of the Moody's Maximum Rating Distribution Test and is also violating the Adjusted Overcollateralization Test, the Class A Interest Coverage Test and the Class B Interest Coverage Test.

BREUNERS: Real Estate Bids Must be in by September 29-----------------------------------------------------Breuners Home Furnishings Corp. retained Keen Realty, LLC to market and dispose of the company's retail, distribution center, and office leasehold interests located throughout the northeast and northern California. Keen reported that the leaseholds will be auctioned on October 6, 2004. The deadline for submitting bids is September 29, 2004. Breuners is the parent company to Huffman Koos, Good's Furniture, and Breuners Home Furnishings, all featuring quality, value-priced brand named furniture. Breuners Home Furnishings filed for Chapter 11 protection on July 14, 2004 in the United States Bankruptcy Court District of Delaware. Keen Realty is a real estate consulting firm specializing in maximizing the value of its clients' real estate assets nationwide.

"We have been marketing these leasehold interests for approximately two months. We have received an overwhelming amount of interest, as the leases are located in prime locations throughout the northeast and in northern California," said Matthew Bordwin, Keen Realty's Executive Vice President. "Interested parties must submit bids as per the Court approved bid procedures no later than September 29th. Qualified bidders will have the opportunity to compete for the locations at the auction on October 6th," Mr. Bordwin added.

These locations are available:

-- Operating as Huffman Koos:

* 20 retail leases, consisting of 997,751+/- sq. ft. of retail space, located in New York, New Jersey, and Connecticut, and

* two distribution centers totaling 450,608+/- sq. ft. located in Connecticut and New Jersey;

-- Operating as Good's Furniture:

* 17 retail leases, consisting of 679,009+/- sq. ft. of retail space, located in Pennsylvania, New Jersey, and Delaware, and

* two distribution centers totaling 178,000+/- sq. ft. located in Delaware and Pennsylvania;

Headquartered in Lancaster, Pennsylvania, Breuners Home-- http://www.bhfc.com/-- is one of the largest national furniture retailers focused on the middle to upper-end segment of the market. The Company, along with its debtor-affiliates, filed for chapter 11 protection on July 14, 2004 (Bankr. Del. Case No. 04-12030). Great American Group, Gordon Brothers, Hilco Merchant Resources, and Zimmer-Hester were brought on board within the first 30 days of the bankruptcy filing to conduct Going-Out-of- Business sales at the furniture retailer's 47 stores. Bruce Grohsgal, Esq., and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young & Jones represent the Debtors in their restructuring efforts. The Company reported more than $100 million in assets and liabilities when it sought protection from its creditors.

CALPINE CORP: Commencing $360 Million Preferred Equity Offering---------------------------------------------------------------Calpine Corporation (NYSE: CPN) reported that Calpine (Jersey) Limited, a new company being formed as an indirect, wholly owned subsidiary of Calpine, intends to commence an offering of $360 million of two-year Redeemable Preferred Shares. The offering is subject to the receipt of certain regulatory approvals.

The proceeds of the offering of the Redeemable Preferred Shares will be initially loaned to Calpine's 1,200-megawatt Saltend cogeneration power plant located in Hull, Yorkshire, England, and the payments of principal and interest on such loan will fund payments on the Redeemable Preferred Shares.

The net proceeds of the Redeemable Preferred Shares offering will ultimately be used as permitted by the company's indentures.

The Redeemable Preferred Shares have not been registered under theSecurities Act of 1933, and may not be offered in the United States absent registration or an applicable exemption from registration requirements. The Redeemable Preferred Shares will be offered in a private placement in the United States under Regulation D under the Securities Act of 1933 and outside of the United States pursuant to Regulation S under the Securities Act of1933.

About Calpine

Calpine Corporation (S&P, B, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, NegativeOutlook), is a North American power company dedicated to providing electric power to customers from clean, efficient, natural gas-fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit http://www.calpine.com/

* * *

As reported in the Troubled Company Reporter on Sept. 20, 2004, these notes currently trade in the mid-sixties:

* 7.750% notes due April 15, 2009; * 8.500% notes due February 15, 2011; and * 8.625% notes due August 15, 2010.

As reported in the Troubled Company Reporter on August 18, 2004, Calpine Corp.'s outstanding $5.5 billion senior unsecured notes are affirmed at 'B-' by Fitch Ratings. In addition, CPN's outstanding $2.9 billion second priority senior secured notes are affirmed at 'BB-' and its $1.1 billion outstanding convertible preferred securities/high TIDES at 'CCC'. The Rating Outlook for CPN is Stable.

CPN's ratings reflect its highly leveraged financial profile and exposure to cyclical commodity market conditions, which continue to reduce realized returns on the unhedged portion of CPN's generating portfolio. In addition, CPN's remaining plant construction program will continue to place near-term pressure on the company's credit profile as cash inflows and earnings tend to lag investment expenditures. For the twelve-month period endedMarch 31, 2004, lease adjusted debt to EBITDAR exceeded 10.0 times(x). CPN continues to pursue the sale of some of its more liquid assets, including the planned sale of approximately 230 billion cubic feet equivalent (Bcfe) of Canadian-based natural gas reserves and ongoing monetization of above-market power sales contracts, further reducing financial flexibility.

CPN's credit measures could conceivably strengthen over the next several years as new projects enter commercial operation and begin to produce cash flows. However, upward movement in CPN's ratings would require both a cyclical recovery in spark spreads and deployment of free cash flow generated from this recovery toward meaningful debt reduction. The degree to which CPN is successful in negotiating new long-term power sales agreements will also have a potentially positive impact on the current ratings. However, to the extent that new contracts relate to incremental plant development, rather than contracting CPN's existing asset portfolio, CPN could face continuing liquidity risk to the extent new construction activity is primarily debt-funded. In this regard, advance realization of equity profits through contract monetizations, while having proven critical to the resolution of near-term liquidity issues, could further delay a sustained recovery in financial measures.

Favorable credit considerations include CPN's sound operating fundamentals and the core competencies of CPN's power generating activities. CPN operates a geographically diverse portfolio of highly efficient base load natural gas-fired generating units. With approximately 52% of its estimated 2004 power sales hedged under long-term contracts primarily with creditworthy utilities, municipalities, co-ops, and other load-serving entities, CPN is somewhat insulated in the near term from the depressed spark spread environment. However, Fitch notes that, absent any new contracts, the percentage of CPN's generating portfolio under contract would decline to around 35% by 2006.

CPN's senior secured rating is three notches higher than CPN's senior unsecured rating, reflecting the enhanced structural position of secured creditors and Fitch's evaluation of the underlying collateral package. The secured notes are collateralized by a second priority lien on substantially all of the assets owned directly by CPN, including natural gas reserves and certain generating facilities. In addition, the notes are secured by a second priority pledge of equity interests in most of CPN's first tier domestic subsidiaries. Although the new secured notes are effectively subordinated to approximately $6.2 billion of subsidiary debt and lease obligations, in Fitch's view, the secured creditors are afforded reasonable asset protection given the lower proportion of secured debt, relative to total corporate debt at the CPN holding company level.

Moreover, the terms of CPN's most significant subsidiary debt obligations, including $3.2 billion of secured construction debt, do not feature overly restrictive cash trapping mechanisms. Fitch has reviewed its recovery analysis in light of recent discussions regarding the potential monetization of CPN's Canadian gas reserves. Assuming sale proceeds are used to repay outstanding first-priority debt, the immediate impact on recovery rates for CPN's second priority secured debt is relatively neutral. CPN's senior unsecured debt has lower recovery prospects as a consequence of the security pledged to first and second lien creditors.

The current Stable Outlook reflects CPN's success in eliminating all remaining 2004 liquidity hurdles, including the refinancing of $2.4 billion of secured subsidiary construction debt, which would have matured in November 2004 and repurchased $1 billion of convertible securities, which could have been put back to CPN in December 2004. As a result, remaining debt maturities over the2004-2006 timeframe are relatively modest and should not create any significant liquidity stress. However, CPN is faced with the maturity of approximately $2.4 billion of senior unsecured debt obligations in 2008, and the company's prospects for refinancing are highly dependent on favorable power market and capital market circumstances. In the meantime, conservatively forecast debt service coverage measures remain tight and with over $3 billion of floating-rate debt, CPN is sensitive to increasing interest rates. CPN's inability to de-leverage ahead of its 2008 maturities will likely result in downward pressure on CPN's ratings.

CATHOLIC CHURCH: Diocese of Tucson Files for Chapter 11 Protection------------------------------------------------------------------Bishop Gerald F. Kicanas directed the filing of a voluntary petition for a Chapter 11 reorganization and a plan of reorganization for the Diocese of Tucson in the U.S. Bankruptcy Court for the District of Arizona, Tucson Division.

Attorneys for the Diocese filed the petition electronically at 8 a.m. Monday morning. The attorneys filed the plan of reorganization and a disclosure statement late yesterday.

In a letter that the Bishop has asked be communicated this week to parishioners at the 75 parishes in the nine-county diocese, the Bishop tells Catholics that he believes the reorganization of the Diocese under Chapter 11 represents "the best opportunity for healing and for the just and fair compensation of those who suffered sexual abuse by workers for the Church in our Diocese."

Drawing upon scripture in his letter with a quote from St. Paul's Second Letter to the Corinthians, Bishop Kicanas urges Catholics to "be compassionate, be encouraged."

"We need compassion to reach out to all those who have been abused by workers for the Church," the Bishop writes. "They are our sisters and brothers who truly deserve our compassion, respect and our love."

The Bishop asks Catholics to read a letter he has written to victims of abuse about his decision to file for Chapter 11 reorganization. He asks Catholics to reflect on how they can help bring about healing.

The Bishop also urges Catholics to be encouraged as their Diocese enters the Chapter 11 process, telling them "it will allow us to continue the mission of the Church in our Diocese.

"We need encouragement to continue and even to augment the mission that Christ has entrusted to us. That mission is desperately needed in our society, perhaps even more so now than at any other time in our history."

The Chapter 11 process, the Bishop writes, "will establish an orderly way, under the supervision of the Bankruptcy Court, by which those who have been harmed can make a claim and have that claim evaluated for possible compensation."

"I firmly believe that this reorganization plan is the best way for the Diocese to work constructively with all those who are victims -- those who have pursued compensation and those who have not; those who are known and those who have not yet come forward," the Bishop writes.

The Bishop informs Catholics that the Diocese did everything it could to settle the pending abuse lawsuits, but, the Bishop writes, "I could not have agreed to a settlement if it would have meant stripping the Diocese of everything and thus limiting our ability to respond to the needs of others who have been hurt who may come forward in the future."

He also tells Catholics that the Diocese will continue to try to resolve these cases and any others that come forward in a consensual manner in the context of the reorganization case, if it is possible to do so.

In his letter to victims of abuse about his decision to file for Chapter 11 reorganization, Bishop Kicanas writes, "I think of you with concern and with a longing to restore your trust and heal your hurt. I truly hope that you will understand what has motivated my decision.

"To each of you I extend my deepest personal sorrow, and I communicate to you the sorrow of all the people of the Church of the Diocese of Tucson."

The Bishop tells victims that the Diocese has not filed for Chapter 11 to avoid its responsibility to them.

"On the contrary," the Bishop writes, "I truly see the reorganization process and the reorganization plan that we have submitted as the only and best way that the Diocese can address its responsibility to you, can continue to meet its commitment to institute programs to prevent abuse, and can continue its mission to all those who depend upon the ministry and outreach of the Church."

The Bishop's letters about the filing as well as other relevant information are posted on the Diocesan Web site at http://www.diocesetucson.org/under "Chapter 11 Financial Reorganization."

Response of Parishes to Filing by Diocese

In August, the pastors of parishes within the Diocese of Tucson formed a committee to explore, with the assistance of legal counsel hired by the parishes, the possible implications for parishes of a Chapter 11 reorganization by the Diocese.

The members of the committee are Msgr. Thomas Cahalane, pastor of Our Mother of Sorrows Parish in Tucson; Msgr. Robert Fuller, pastor of St. Frances Cabrini Parish in Tucson; and Rev. Domenico Pinti, pastor of St. George Parish in Apache Junction.

Parishes within the Diocese of Tucson now are represented in matters related to the reorganization case and the Plan of Reorganization by their own legal counsel.

Communication regarding the response of parishes to the filing by the Diocese will come from the committee.

What the Diocese Is Filing

While only the filing of a Voluntary Petition is necessary to initiate a Chapter 11 case, the filing by the Diocese is comprehensive in that it will include all the forms, schedules, statements, Plan of Reorganization and associated documentation that are required under Chapter 11 of the Bankruptcy Code.

Components of Plan of Reorganization

The Diocese's plan of reorganization proposes a process by which the claims of victims can be determined and satisfied.

It provides for the Diocese to establish two trusts, and gives victims the right to elect to have their claims tried by a jury or determined in a different process by a master.

The plan of reorganization provides the framework by which the process will be accomplished and the plan funded. It also provides for the satisfaction of the claims of other creditors of the Diocese.

Background Information

The Diocese is one of the oldest corporations in the state of Arizona. Bishop Henri Granjon, the second Bishop of Tucson, incorporated the Diocese in 1914 as a corporation sole under the name of "Roman Catholic Church of the Diocese of Tucson."

The original articles state the object of the corporation was "the care and administration of the temporal affairs of the Roman Catholic Church of the Diocese of Tucson, which embraces the State of Arizona, and a portion of the State of New Mexico, and religious, educational, and charitable ministrations, and maintenance and care of all the property now held, or that may be received, by the said Roman Catholic Church of the Diocese of Tucson."

The 1914 articles of incorporation have been amended over the years to reflect the succession of bishops and changes in the territory of the Diocese.

In 1969, the Diocese of Phoenix was formed from the Diocese of Tucson, leaving the Diocese of Tucson with its present territory of La Paz, Yuma, Pinal, Pima, Gila, Santa Cruz, Cochise, Graham, and Greenlee counties. Geographically, the Diocese is the fifth largest diocese in the continental U.S. with an area of 42,707 square miles.

In a total population of 1.45-million in the counties that comprise the territory of the Diocese, there are an estimated 300,000-plus Roman Catholics who are served by 75 parishes, dozens of missions, and 28 Catholic schools (20 parochial and eight private).

The Diocese has 43 employees (34 full-time and nine part-time). Full-time employees include Bishop Kicanas, two priests, two sisters and 29 lay persons. Part-time employees include one priest, one sister and seven lay persons.

Church personnel who minister in the territory of the Diocese include 189 priests, 238 religious women (sisters), 143 deacons, nearly 1,000 lay employees of parishes and schools and 36 lay employees of the Diocese itself. The majority of all Church personnel are employees of parishes and schools.

In addition, there are thousands of volunteers who participate in the spiritual and service ministries of the parishes and schools.

Catholic schools in the territory of the Diocese, including the parochial schools, have a total enrollment of 7,753 students. More than 22,000 Catholic children who attend public schools receive religious education through parish religious education programs.

Roman Catholics are approximately 25 per cent of the total population within the territory of the Diocese. Within the Catholic population, 25 per cent are Hispanic, 67 per cent Anglo, four per cent Native American, three per cent Black American and the remaining one per cent are of other nationalities.

Pending Litigation

There are 22 pending suits (33 plaintiffs) naming the Diocese that allege abuse of children by priests. There are two other pending lawsuits. The filing of Chapter 11 automatically imposes a stay on all litigation. Plaintiffs in the lawsuits become claimants (creditors) in the Chapter 11 case.

CATHOLIC CHURCH: List of Diocese of Tucson's 20 Largest Creditors-----------------------------------------------------------------The Roman Catholic Church of the Diocese of Tucson released a list of its 20 largest unsecured creditors:

CONSOLIDATED MEDICAL: Net Losses Raise Going Concern Doubt----------------------------------------------------------Consolidated Medical Management, Inc., was incorporated under the laws of the State of Montana on August 13, 1981 under the name Golden Maple Mining and Leaching Company, Inc. On May 23, 1998, it changed its name to Consolidated Medical Management, Inc. In August 2001, the Company decided to refocus on the oil and gas industry and is currently doing business as Consolidated Minerals Management, Inc. CMMI moved its corporate office in July 2003 to Baton Rouge, LA.

For the quarter ended June 30, 2004, CMMI incurred a net loss of $78,335 as compared to a net loss of $81,044 for the quarter ended June 30, 2003. The loss is attributable to the accrual of expenses incurred for consultants and maintaining operations while seeking to restructure its business operations.

The Company's recurring negative financial results raise substantial doubt about the Company's ability to continue as a going concern.

The Company currently anticipates that its existing cash and cash equivalents balance will fund operations and continue energy development at the current level of activity into the third quarter of 2004. The Company will need to raise additional funds through additional debt or equity financing. There can be no assurance that additional equity or debt financing will be available when needed or on terms acceptable to the Company.

The market price of the Company's common stock has fluctuated significantly since it began to be publicly traded in 1998 and may continue to be highly volatile. Factors such as the ability of the Company to achieve development goals, ability of the Company to profitably complete energy projects, the ability of the Company to raise additional funds, general market conditions and other factors affecting the Company's business that are beyond the Company's control may cause significant fluctuations in the market price of the Company's common stock. The market prices of the stock of many energy companies have fluctuated substantially, often unrelated to the operating or research and development performance of the specific companies. Such market fluctuations could adversely affect the market price for the Company's common stock.

About the Company

Consolidated Medical Management, Inc. (CMMI) is a health care management services organization. The Company's holdings include a psychiatric management company, independent diagnostic centers, and other health service companies. CMMI is active in Southwestern U.S.

Series 2001-6 and 2001-19 are swap independent synthetic transactions that are weak-linked to the underlying securities, Delta Air Lines Inc.'s 8.3% senior unsecured notes due Dec. 15, 2029. The rating actions reflect the Sept. 16, 2004 lowering of the senior unsecured debt ratings on Delta Air Lines Inc.

As reported in the Troubled Company Reporter on September 20, 2004, Standard & Poor's Ratings Services lowered selected ratings on Delta Air Lines Inc., including lowering the corporate credit rating to 'CC' from 'CCC', following the airline's launch of an exchange offer for unsecured bonds and some aircraft-backed debt. The outlook is negative.

"The downgrade reflects a high likelihood that, with the launch of an exchange offer that would pay less than face value to certain Delta bondholders, Standard & Poor's will shortly lower the company's corporate credit rating either to 'SD' (selective default), if the exchange offer is successful, or to 'D' if the offer fails and Delta files for bankruptcy," said Standard & Poor's credit analyst Philip Baggaley. "The rating change does not indicate a heightened risk of a bankruptcy filing, as a successful exchange offer (which would require also fulfillment of other conditions) could avert such an outcome.

Accordingly, Standard & Poor's affirmed ratings on securities that are not part of the exchange offer," the credit analyst continued. The downgrade also was not based on the going concern qualification announced by Delta's auditors, though that announcement underlines the gravity of the company's financial outlook.

Delta proposes to offer up to $680 million of new secured notes to holders of $2.2 billion of unsecured bonds and $471 million in three junior classes of enhanced equipment trust certificates --EETCs. The new secured notes would consist of three classes that are pari passu and have an equal claim on the same collateral pool, but have different coupons and maturities. The new notes would be offered to existing bondholders, grouped by the maturity of the securities that they hold currently, at various exchange ratios. There are numerous conditions attached to completion of a successful exchange offer, including minimum issuance of $612 million new notes and conclusion of a cost-saving contract with Delta's pilots' union. Delta has not requested credit ratings on the exchange notes. If the offer were fully subscribed by each group of bondholders, Delta would reduce its total debt by about $875 million, exchanging $680 million of new notes for about $1.56 billion of existing bonds and certificates.

The exchange offer, which will be open until Oct. 14, 2004, is intended to advance Delta's overall restructuring plan, which seeks to combine cost cuts (an additional $2.7 billion of annual cash savings by 2006, including $1 billion being sought from pilots), enhanced customer service, debt reduction, and widespread network changes (including the closure of Delta's hub at Dallas-Fort Worth International Airport). The proposed exchange offer, although it does not materially reduce Delta's overall $20 billion of debt and leases, would lighten near-term debt maturities and help persuade pilots that management is seeking sacrifices from a range of stakeholders, not just labor.

Ratings will be lowered to 'D' upon a bankruptcy filing or to 'SD' upon a distressed debt exchange, such as that proposed Sept. 15, 2004. A new corporate credit rating would be assigned after completion of such an exchange.

COVANTA ENERGY: Asks Court to Close 62 Chapter 11 Cases-------------------------------------------------------Pursuant to Section 350 of the Bankruptcy Code and Rule 3022 of the Federal Rules of Bankruptcy Procedure, Covanta Energy Corporation and its debtor-affiliates ask the United States Bankruptcy Court for the Southern District of New York to close 62 Chapter 11 cases:

Section 350(a) provides that "[a]fter an estate is fully administered and the court has discharged the trustee, the court shall close the case." Rule 3022 further provides that "[a]fter an estate is fully administered in a chapter 11 reorganization case, the court, on its own motion or on motion of a party in interest, shall enter a final decree closing the case."

"[F]actors that the court should consider in determining whether the estate has been fully administered include (1) whether the order confirming the plan has become final; (2) whether deposits required by the plan have been distributed; (3) whether the property proposed by the plan to be transferred has been transferred; (4) whether the debtor or the successor of the debtor under the plan has assumed the business or management of the property under the plan; (5) whether payments under the plan have commenced; and (6) whether all motions, contested matters, and adversary proceedings have been finally resolved."

James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton in New York, tells the Court that on March 10, 2004, all of the conditions precedent to the effectiveness of the Debtors' Second Reorganization and Liquidation Plans have occurred or were waived. The facts and circumstances of the 62 cases show that each case has been fully administered:

(a) The Reorganization Confirmation Order has become final;

(b) Deposits required by the Reorganization Plan have been distributed;

(c) Property proposed by the Reorganization Plan to be transferred has been transferred;

(d) The Reorganized Debtors have assumed the business and management of the property under the Reorganization Plan;

(e) Payments under the Reorganization Plan have commenced; and

(f) All motions, contested matters and adversary proceedings have been finally resolved with regard to the 62 cases.

Mr. Bromley points out that the Court has no need to keep the cases open to exercise its jurisdiction over any outstanding matters. Additionally, if the cases aren't closed, the Reorganized Debtors would unnecessarily continue to incur U.S. Trustee fees.

Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)

CRI-II: Inks Agreements to Sell Interests in Four Properties------------------------------------------------------------C.R.I., Inc., as managing general partner of CRI-II, is pleased to announce agreements to sell the partnership's limited partner interests in four properties to affiliates of Equity Resource Investments, LLC, a Massachusetts corporation. The aggregate selling price for CRI-II's interests in the four properties is $13,757,010.

The properties consist of apartment complexes located in Illinois (2) and Maryland (2) that range in size from 120 units to 200 units. The closings of the transactions are subject to completing due diligence and obtaining required government approvals. All four sales are expected to occur in December 2004.

Affiliates of Equity Resources also will acquire the general partner interests held by affiliates of CRI in these investment properties.

Other affiliates of Equity Resources currently hold over 20% of the outstanding interests in CRI-II.

The sale agreements partially implement the Plan of Liquidation approved by CRI-II's investors pursuant to its February 14, 2004 consent solicitation. CRI-II is continuing to explore sale opportunities for the remaining eight local partnerships in which it owns an interest, including possible sales of certain interests to Equity Resources affiliates.

CRI is a real estate investment firm based in Rockville, Maryland. Its portfolio includes nearly 200 multi-family apartment complexes located throughout the United States. CRI-II is a Maryland limited partnership.

DELTA AIR: Sky Chefs Conflict Disrupts Food Service---------------------------------------------------Jeff St. Onge at Bloomberg News, while on Delta flight 570 from Salt Lake City to Washington Dulles International Airport last week, was offered snacks like raisins, muffins and applesauce because LSG Sky Chefs didn't deliver meals for the four-hour flight.

Lynne Marek at Bloomberg News found that Delta didn't serve meals on about 10 percent of flights because of a "conflict" with one of its LSG Sky Chefs, citing Delta spokeswoman Benet Wilson as her source. Sky Chefs delined to provide Ms. Marek with additional information about the "contractual disagreement."

"Right now we're working to make alternative arrangements and get something in place in the next few days," Ms. Wilson told Ms. Marek.

Bloomberg News reports that most of Delta's food is provided by Zurich-based Gate Gourmet International, which is owned by the private equity firm Texas Pacific Group.

Bill Brandt at Development Specialists Inc. speculates that Delta's "conflict" with Sky Chefs may be a sign that Delta is seeking to conserve cash ahead of a possible bankruptcy filing and Sky Chefs is pressing for payment. Ms. Marek notes that Sky Chefs was stuck with millions of dollars in claims in other carriers' chapter 11 cases. "Airlines are horrible cases for trade vendors," Mr. Brandt told Bloomberg reporters. "Sky Chefs has been invited to this party before and probably would to take a pass on future festivities."

About Delta Air Lines

Delta Air Lines -- http://delta.com/-- is proud to celebrate its 75th anniversary in 2004. Delta is the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, offering daily flights to 493 destinations in 87 countries on Delta, Song, Delta Shuttle, the Delta Connection carriers and its worldwide partners. Delta's marketing alliances allow customers to earn and redeem frequent flier miles on more than 14,000 flights offered by SkyTeam, Northwest Airlines, Continental Airlines and other partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services.

* * *

As reported in the Troubled Company Reporter on Sept. 16, 2004, Delta Air Lines filed a Form 8-K with the Securities and Exchange Commission to make changes in its Annual Report on Form 10-K for the year ended December 31, 2003.

The Annual Report is being revised so it may be incorporated into another document. Since Delta filed the Annual Report with the SEC, significant events have occurred which have materially adversely affected Delta's financial condition and results of operations. These events, which have been reported in Delta's subsequent SEC filings, include a further decrease in domestic passenger mile yield and near historically high levels of aircraft fuel prices. The Annual Report has been revised to disclose these events and the possibility of a Chapter 11 filing in the near term. Additionally, as a result of Delta's recurring losses, labor and liquidity issues and increased risk of a Chapter 11 filing, Deloitte & Touche LLP, Delta's independent auditors, has reissued its Independent Auditors' Report to state that these matters raise substantial doubt about the company's ability to continue as a going concern.

As reported in the Troubled Company Reporter on August 23, 2004, Standard & Poor's Ratings Services lowered Delta Air Lines, Inc.'s corporate credit rating and the ratings on Delta's equipment trust certificates and pass-through certificates to 'CCC'. Any out-of-court restructuring of bond payments or a coercive exchange would be considered a default and cause the company's corporate credit rating to be lowered to 'D' -- default -- or 'SD' -- selective default, S&P noted. Ratings on Delta's enhanced equipment trust certificates, which are considered more difficult to restructure outside of bankruptcy, were not lowered.

ECHOSTAR COMMS: Subsidiary to Discontinue Partnership with Qwest----------------------------------------------------------------EchoStar Communications Corporation's (NASDAQ: DISH) subsidiary, EchoStar Satellite LLC, has elected not to pursue expansion of its marketing relationship with Qwest Corp.

"We have recently formed several other partnerships with telecommunication companies that have demonstrated significant financial commitment and a desire for long-term partnership that provides beneficial bundled service for our joint customers," said Nolan Daines, senior vice president, Alliance Management Group, the broadband division of EchoStar. "Through these partnerships, our joint customers are enjoying a single bill, single point of contact, enhanced customer experience and bundled discounts."

EchoStar will seek to expand relationships with current and future telecommunication partners that focus on meeting customer demand for single-bill, bundled services. Customers across the country have embraced the convenience and cost savings provided through these successful partnerships.

EchoStar will continue to honor its current, year-old relationship with Qwest, in which Qwest has agreed to sell DISH Network satellite TV service to Qwest's customers through the end of the multi-year contract.

About EchoStar

EchoStar Communications Corporation (NASDAQ: DISH) serves more than 10.1 million satellite TV customers through its DISH Network, the fastest-growing U.S. provider of advanced digital television services in the last four years. DISH Network offers hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. DISH Network ranks No. 1 in Customer Satisfaction among Cable/Satellite TV Subscribers by J.D. Power and Associates. Visit EchoStar's DISH Network at http://www.dishnetwork.com/or call 800-333-DISH (3474).

At June 30, 2004, EchoStar Communications' balance sheet showed a $1,739,832,000 stockholders' deficit, compared to a $1,032,524,000 at December 31, 2003.

ENER1 INC: Ability to Continue as a Going Concern is in Doubt -------------------------------------------------------------Ener1 Inc., is a Florida corporation founded in 1985. Ener1 was formerly named Inprimis, Inc., and before that it was named Boca Research, Inc. During 2002 and 2003, the Company manufactured set-top boxes and other digital entertainment products through subcontractors and marketed those products to the hospitality and healthcare markets through its 49% owned subsidiary EnerLook Healthcare Solutions, Inc., and to other markets through its former Digital Media Technologies Division. In 2003, the majority of the assets in the Digital Media Technologies Division were transferred to EnerLook.

The Company's consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has experienced net operating losses since 1997 and negative cash flows from operations since 1999, and had an accumulated deficit of $66.7 million as of June 30, 2004. It is likely that the Company's operations will continue to incur negative cash flows through June 30, 2005. Additional financing will be required to fund the Company's planned operations through June 30, 2005, and the Company intends to seek additional debt or equity financing by the first quarter of 2005. If additional financing is not obtained, such a condition, among others, will give rise to substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time.

Ener1's net sales for the three-month and six-month periods ended June 30, 2004, were $11,000 and $42,000 respectively. These sales were made pursuant to a Small Business Innovative Research contract with the United States Missile Defense Agency. The Company recorded no sales from continuing operations during the same periods in 2003.

During the three month period ended June 30, 2004, Ener1 began preparing its battery manufacturing plant to begin production, in addition to continuing research and development activities. A significant portion of resources previously devoted to battery research and development and selling, general and administrative expenses were reallocated to implementing a new manufacturing infrastructure, including new personnel, policies and procedures.

Research and Development Expenses for the three month and six month periods ended June 30, 2004 increased by 48.2% to $667,000 and by 53.3% to $1,177,000, respectively, when compared to the same periods in 2003. These increases were due primarily to: increases in salaries, benefits and outside services related to the Company's fuel cell segment and its recently formed nanotechnology subsidiary.

Selling, General and Administrative Expenses for the three month and six month periods ended June 30, 2004 increased by 105.3% to $1,706,000 and 156.8% to $4,166,000, respectively, when compared to the same periods in 2003. These increases in SG&A were due primarily to increases in: salaries, wages and benefits; professional fees; and investor relations expenses. Expenses for rents, insurance, and general administrative expenses also increased.

Liquidity and Capital Resources

As of December 31, 2003 the Company had a working capital deficit of $7.4 million. During the six months ended June 30, 2004, working capital increased by $12.7 million, resulting in positive working capital of $5.3 million as of June 30, 2004. This increase in working capital was primarily due to an increase in cash and a decrease in current debt and liabilities, as a result of the sale and partial use of proceeds to repay debt, in January 2004, of $20.0 million in aggregate principal amount of the Company's 5% senior secured convertible debentures due 2009 and the purchase by ITOCHU Corporation in January, 2004 of 1,500,000 shares of the Company's common stock for net proceeds of $1,050,000.

During the six month period ended June 30, 2004, Ener1 expended $638,000 for capital equipment, of which: $234,000 was for manufacturing equipment for its battery manufacturing plant; $111,000 was for administrative equipment, primarily computing equipment; $120,000 was for research and development equipment; and $173,000 was for a vehicle.

Ener1 will require additional capital to support the activities of Ener1 Battery Company through June 30, 2005 (including the operations of its Battery and Fuel Cell segments). Funds will also be required for operations of the Company's new subsidiary, NanoEner, Inc., which was formed in April 2004 to develop and market nanotechnologies, nanomaterials and nano-manufacturing methodologies. The Company intends to seek additional financing by the first quarter of 2005, which may take the form of equity or debt. There is no assurance that any such required capital will be available on terms acceptable to Ener1, if at all.

Ener1 Inc.'s primary lines of business consist of development and marketing of lithium batteries and certain battery components such as electrodes; fuel cells, fuel cell systems and components; and nanotechnology-related manufacturing processes and materials.

ENERGY VISIONS: Expects $1 Million Loss in Second Quarter---------------------------------------------------------Energy Visions, Inc., was unable to timely file current financials without unreasonable effort or expense due to delays in gathering the necessary information and due to financial statement presentation changes to comply with applicable accounting guidelines.

The Company expects to report revenue of approximately $9,000 in the quarter ended June 30, 2004. In the comparative period in 2003 Energy Visions reported no revenue. The Company expects to report a net cumulative loss of approximately $1,056,000 in 2004 as compared with a loss of approximately $927,000 in 2003. The principle reason for the increased loss is the reporting of the Company's equity interest in the results of Pure Energy Inc., 49.6% owned, a loss of approximately $407,000. There was no comparative item in the prior year.

The Company's losses from normal operations declined from approximately $1,022,000 in 2003 to approximately $658,000 in 2004 reflecting lower expenditures in the current year on research and development activities which decreased approximately 46%, from approximately $268,000 in 2003 to approximately $146,000 in 2004. Such reduction includes a recovery of approximately $128,000 upon the issue in the current quarter of common shares in settlement of past research and development services debt. Professional fees also decreased by approximately 65% from approximately $360,000 in 2003, to approximately $125,000 in 2004. The Company incurred only modest professional fees in the current period, and that period includes credit adjustments in respect of a fee settlement with the Company's prior auditors and a lower than anticipated September 2003 audit fee. The prior period also included a one-time gain of $95,000 realized upon the sale of options in an unrelated company. There is no current year equivalent of such item.

About Energy Visions Inc.

EVI develops and commercializes advanced battery and direct methanol fuel cell technologies and products. EVI possesses proprietary flowing electrolyte direct methanol fuel cell technologies that it has been developing for portable power systems. EVI also owns a major interest in Pure Energy Inc. whose subsidiary, Pure Energy Visions Inc., manufactures and markets rechargeable and single-use alkaline batteries globally. These products are sold under the "Pure Energy", XL(tm) and "Pure Power" labels and to private label customers worldwide. Pure Energy products can be purchased at several leading retailers including Wal-Mart, Radio Shack, London Drugs and Western Grocers. According to ACNielsen Canada in 2003 Pure Energy sold 51.2% of all consumer rechargeable batteries and 48% of all chargers sold in Canada at mass merchandisers (Wal-Mart and Zellers), Grocery Banners and Toys R Us. According to ACNielsen the number of consumer rechargeable batteries sold in Canada at these retail channels in 2003 grew by 28% over 2002 figures.

At March 31, 2004, Energy Visions Inc.'s balance sheet showed a $2,500,390 stockholders' deficit, compared to a $2,884,061 deficit at September 30, 2003.

FALCON PRODUCTS: Levine Leichtman to Provide $135MM Refinancing---------------------------------------------------------------Falcon Products, Inc. (NYSE: FCP), a leading manufacturer of commercial furniture, has received a commitment letter from Levine Leichtman Capital Partners. The Los Angeles-based private equity firm manages in excess of $1 billion in institutional capital, and is leading a group of investors in a $135 million refinancing of Falcon's existing credit facility. Terms of the financing will be disclosed upon completion of the transaction, which is scheduled on or around September 30, 2004.

"We're pleased to have reached this agreement with Levine Leichtman Capital Partners. The refinancing will provide us with significant liquidity and covenant relief, as we continue to execute our turnaround," Franklin A. Jacobs, Chairman and Chief Executive Officer stated. "This is a strong partner that is known for its successful investments. We were also pleased to have worked with Imperial Capital, the investment bankers who assisted us in successfully achieving this commitment from Levine Leichtman Capital Partners."

"Falcon is the leader in the industry and we're excited about the opportunity to build on their strengths and take advantage of improving industry fundamentals," stated Arthur E. Levine, Founding General Partner of Levine Leichtman Capital Partners. "We anticipate completing this transaction by month end and having a long-term relationship with Falcon."

Falcon Products, Inc. is the leader in the commercial furniture markets it serves, with well-known brands, the largest manufacturing base and the largest sales force. Falcon and its subsidiaries design, manufacture and market products for the hospitality and lodging, food service, office, healthcare and education segments of the commercial furniture market. Falcon, headquartered in St. Louis, Missouri, currently operates 8 manufacturing facilities throughout the world and has approximately 2,100 employees.

* * *

As reported in the Troubled Company Reporter's March 22, 2004edition, Standard & Poor's Ratings Services lowered its corporatecredit rating on furniture manufacturer Falcon Products Inc. to'CCC' from 'B-', and lowered its subordinated debt rating on thecompany to 'CC' from 'CCC'. The outlook is negative.

"The downgrade on St. Louis, Missouri-based Falcon Products Inc.reflects the lower than expected profitability resulting from thecontinued softness within the furniture segments the companyserves, as well as the company's breach of certain bankcovenants," said Standard & Poor's credit analyst Martin S.Kounitz.

Thomas R. Hunt, Esq., at Morris, Nichols, Arsht & Tunnell, in Wilmington, Delaware, tells the Thaxton Court that most of FINOVA Capital's request is entirely without merit and was brought about despite Thaxton's expressed willingness to cooperate to develop a reasonable discovery schedule. Mr. Hunt notes that since FINOVA Capital's document request seeks documents related to the Thaxton Committee's proposal to substantially consolidate all of the Thaxton entities, the document request should be more appropriately directed to the Thaxton Committee. Nonetheless, Thaxton committed to provide documents and information to FINOVA Capital not otherwise produced by the Committee.

FLYI INC: Reports 50.8% Load Factor for August 2004---------------------------------------------------FLYi, Inc., (NASDAQ/NM: FLYI) reported preliminary passenger traffic results for August 2004 for its consolidated Atlantic Coast Airlines operation, as well as specific results for low-fare airline Independence Air. Systemwide -- combining the company's United Express, Delta Connection and Independence Air operations - the company generated 176.7 million revenue passenger miles (RPMs), while available seat miles (ASMs) were 348.1 million. Load factor was 50.8 percent. For the month, 516,275 passengers were carried.

During August 2004, the company's CRJ fleet still was largely in a transitional mode. Following the completion of the August 3 flight schedule, the company no longer operated as a United Express carrier. The remaining 26 United Express CRJs were taken out of service at that time to begin the upgrade process of converting each aircraft to the brand new Independence Air interior and livery. The remaining five J-41 turboprops still in service on August 3 were retired. Since August was the final month of the three-month transition out of the United Express program, comparisons of year-over-year traffic with the previous Atlantic Coast Airlines operation are no longer meaningful and are not shown.

During August 2004, Independence Air generated 126.9 million RPMs, with ASMs of 279.1 million. Load factor for the month was 45.5%, with 342,674 passengers carried. The low-fare airline added new service to 12 markets during August - four August 1, four August 15 and four August 23 - in addition to the 22 destinations previously launched during June and July, for a total of 34. One more new Independence Air market was added in September, three more are scheduled for October and one more for November.

Independence Air employs approximately 4,700 aviation professionals. The Independence Air hub at Washington Dulles is now the largest low-fare hub in America in terms of total departures.

As reported in the Troubled Company Reporter on August 31, 2004, Moody's Investors Service placed the debt ratings (Senior ImpliedRating, B3) of FLYi, Inc., and its primary operating subsidiaryAtlantic Coast Airlines, Inc., under review for possible downgrade. Ratings placed under review:

The review was prompted by the difficulties the company is experiencing during the initial stages of its transition from a fee for service carrier to a fully independent airline including lower than expected load factors and yields, higher than anticipated costs associated with the transition, and an earlier than expected termination of its fee for service contract with Delta Air Lines, Inc. The review will focus on the cash flow and liquidity implications of these factors and the likelihood that the company's current substantial cash balances will be sufficient to support operations until a financially stable business base can be built.

Moody's will assess the ability and the length of time necessary for the company to increase currently low passenger load factors at fare levels sufficient to generate a profit. Moody's notes that the rapid expansion of capacity at Dulles International Airport (FLYi's primary hub) has been one of the primary factors in the under performance of these two metrics. Also included in the review will be an assessment of the impact on liquidity of the earlier than expected termination of the company's contract with Delta Air Lines, Inc., the cost of conversion of the remainder of the regional jet fleet to service as Independence Air, and the costs associated with disposing of aircraft that are or will be grounded by the company as a result of the cancellation of the United and Delta contracts. Moody's anticipates that cash will decline from current levels ($345 million at the end of June 2004) if current business pressures and high fuel prices persist. In addition, FLYi faces large aircraft lease payments in early 2005. An expectation that cash flows will be sufficient to enable the company to maintain adequate liquidity through the seasonally weak first calendar quarter would be supportive of the current ratings but any expectations of protracted weak cash flow and eroding liquidity would result in a downgrade.

Moody's will also review the current values of the aircraft securing the company's Enhanced Equipment Trust Certificates. The aircraft securing these certificates include eight J-41 turboprops and six CRJ-200ER aircraft. Should the loan to value associated with the Class A certificates be determined, in Moody's opinion, to have deteriorated to a level substantially higher than 50%, a downgrade of these certificates may be deemed to be warranted. Junior debt classes will be adjusted accordingly.

FLYi, Inc., and its primary subsidiary, Atlantic Coast Airlines,Inc., doing business as Independence Air and are headquartered inDulles, Virginia.

FLYI INC: Analysts See Opportunities Due to Rivals' Bankruptcies----------------------------------------------------------------FLYi, Inc., (NASDAQ/NM: FLYI) is expected to ride on the financial and business problems of U.S. Airways and United Airlines and grab more passengers in Washington's Dulles airport, Bloomberg News reports, citing Barron's as its source.

US Airways filed its first Chapter 11 petition on August 11, 2002. Under a chapter 11 plan declared effective on March 31, 2003, USAir emerged from bankruptcy with the Retirement Systems of Alabama taking a 40% equity stake in the deleveraged carrier in exchange for $240 million infusion of new capital.

As reported in the Troubled Company Reporter on September 13, 2004, US Airways Group, Inc. (Nasdaq: UAIR) and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code after talks with various labor groups failed.

United Air Lines is also under bankruptcy since December 9, 2002 and is facing pressures from various stakeholders including its employees. As reported in the Troubled Company Reporter on September 1, 2004, flight attendants expressed grave concern over the continued reckless and incompetent strategies of United Airlines senior management. Leaders of the Association of Flight Attendants- CWA, AFL-CIO at United Airlines unanimously passed a resolution of no confidence in the senior management of United Airlines and vowed to take all necessary and appropriate legal steps to seek the failed executives' replacement.

Translated as a move seizing that opportunity, FLYi introduced new non-stop service from Washington Dulles International Airport to both Orlando International Airport and Tampa International Airport beginning Nov. 3, 2004, with all flights planned to be operated by the company's brand new 132-passenger Airbus A319 aircraft.

The schedules to Tampa and Orlando will each include three non-stops from Dulles with 7-day advance purchase sale fares to both cities as low as $64 one way for tickets purchased at FLYi.com by Sept. 27, 2004, for travel by Jan. 31, 2005. Full schedules as well as sale fare details and restrictions are seen below.

Independence Air Chairman and CEO Kerry Skeen said, " [T]he Independence Air story becomes even more exciting as we begin the second phase of our mission to bring low fares and enthusiastic service to many new destinations. We start with Orlando and Tampa this fall and will continue as we move forward by adding a total of 28 Airbus planes over the next 18 months."

The Independence Air Airbus A319s will feature all-leather seating in a single-class configuration with generous legroom. TV screens will be available in every seatback by next spring, featuring 24 channels of live satellite programming and a wide selection of digital music channels.

In addition to the new non-stops from Washington Dulles, Independence Air will also begin offering non-stop service on Nov. 3, 2004, aboard our 50-seat jets to both Orlando and Tampa from six cities: Knoxville, Tenn. (TYS), Greensboro, N.C. (GSO), Huntsville, Ala. (HSV), Greenville/Spartanburg, S.C. (GSP), Columbia, S.C. (CAE) and Charleston, S.C. (CHS). The schedule from each of these six cities will include two daily non-stops to both Florida destinations, with three non-stops from Knoxville to Orlando. (Initial service from Knoxville and Columbia to Orlando begins on October 13 as previously announced).

* * *

As reported in the Troubled Company Reporter on August 31, 2004, Moody's Investors Service placed the debt ratings (Senior ImpliedRating, B3) of FLYi, Inc., and its primary operating subsidiaryAtlantic Coast Airlines, Inc., under review for possible downgrade. Ratings placed under review:

The review was prompted by the difficulties the company is experiencing during the initial stages of its transition from a fee for service carrier to a fully independent airline including lower than expected load factors and yields, higher than anticipated costs associated with the transition, and an earlier than expected termination of its fee for service contract with Delta Air Lines, Inc. The review will focus on the cash flow and liquidity implications of these factors and the likelihood that the company's current substantial cash balances will be sufficient to support operations until a financially stable business base can be built.

Moody's will assess the ability and the length of time necessary for the company to increase currently low passenger load factors at fare levels sufficient to generate a profit. Moody's notes that the rapid expansion of capacity at Dulles International Airport (FLYi's primary hub) has been one of the primary factors in the under performance of these two metrics. Also included in the review will be an assessment of the impact on liquidity of the earlier than expected termination of the company's contract with Delta Air Lines, Inc., the cost of conversion of the remainder of the regional jet fleet to service as Independence Air, and the costs associated with disposing of aircraft that are or will be grounded by the company as a result of the cancellation of the United and Delta contracts. Moody's anticipates that cash will decline from current levels ($345 million at the end of June 2004) if current business pressures and high fuel prices persist. In addition, FLYi faces large aircraft lease payments in early 2005. An expectation that cash flows will be sufficient to enable the company to maintain adequate liquidity through the seasonally weak first calendar quarter would be supportive of the current ratings but any expectations of protracted weak cash flow and eroding liquidity would result in a downgrade.

Moody's will also review the current values of the aircraft securing the company's Enhanced Equipment Trust Certificates. The aircraft securing these certificates include eight J-41 turboprops and six CRJ-200ER aircraft. Should the loan to value associated with the Class A certificates be determined, in Moody's opinion, to have deteriorated to a level substantially higher than 50%, a downgrade of these certificates may be deemed to be warranted. Junior debt classes will be adjusted accordingly.

FLYi, Inc., and its primary subsidiary, Atlantic Coast Airlines,Inc., doing business as Independence Air and are headquartered inDulles, Virginia.

FOSTER WHEELER: Bud Cherry Now Leads Global Power Business ----------------------------------------------------------Foster Wheeler Ltd. (OTCBB: FWLRF) has consolidated the management of its two power businesses into one global business under the leadership of Bud Cherry. The business unit will be known as Foster Wheeler Global Power Group, and Mr. Cherry is its chief executive officer. The combined businesses represent the business group the Company's securities filings have historically referred to as its Energy Group.

"We have concluded that we and our customers will be best served by consolidating the leadership of these two businesses," said Raymond J. Milchovich, chairman, president and CEO of Foster Wheeler Ltd. "The consolidation provides significant opportunities for achieving synergy across a wide spectrum of product offerings, particularly in the strategically important circulating fluidized bed (CFB) market. Bud's success in strengthening the operational and financial performance of our North American operations made him the right person to lead the new business."

"Each of these businesses have people with tremendous talents and experience," said Mr. Cherry. "I am truly excited about being offered the opportunity to lead the Global Power Group to success as the strongest participant in the global market for energy equipment, aftermarket service, and environmental retrofits."

Key senior executives of Foster Wheeler's Power Group in Europe will now report directly to Mr. Cherry in his new position. To further strengthen the team, Chris Holt, formerly the long-time CFO of Foster Wheeler's U.K.-based subsidiary, has been appointed as the European Power Group's CFO.

Mr. Cherry joined Foster Wheeler in November 2002 as president and chief executive officer of Foster Wheeler Power Group, Inc. Since then, he has also assumed leadership of Foster Wheeler's North American engineering and construction (E & C) operations based in Houston.

Prior to joining Foster Wheeler, Mr. Cherry was chief operating officer of the Oxbow Group where he was responsible for the company's energy and minerals activities.

About the Company

Foster Wheeler, Ltd., is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research, plant operation and environmental services.

At June 25, 2004, Foster Wheeler Ltd.'s balance sheet showed an $856,601,000 stockholders' deficit, compared to an 872,440,000 deficit at December 26, 2003.

FOSTER WHEELER: Swap's 60% Minimum Threshold Remains Unmet----------------------------------------------------------Foster Wheeler Ltd. (OTCBB: FWLRF) announced today that a minimum threshold related to its equity-for-debt exchange remains unmet for one class of securities. Specifically, 57.5% of the revised minimum threshold of 60% has been tendered by holders of the 9.00% Preferred Securities. Foster Wheeler is extending its exchange offer until 5:00 p.m., New York City time, on September 21, 2004.

"Unless the tendered amount of Preferred Securities meets or exceeds an acceptable minimum threshold, this exchange offer will fail," said Raymond J. Milchovich, chairman, president and chief executive officer. "Especially given that we have exceeded the minimum thresholds regarding every other class of securities involved in our exchange offer, it would be a shame if all our stakeholders were forced to suffer because of a small shortfall in the Preferred Securities."

"We hope that all those who have tendered continue to do so, and that those still holding Preferred Securities tender them, so that we can close our offer on Tuesday," continued Mr. Milchovich.

If Foster Wheeler fails to complete the exchange offer, it is then obligated, subject to certain conditions, to commence and attempt to consummate the same economic transactions contemplated by the exchange offer through an alternative implementation structure. This obligation is contained in the lock-up agreements signed with various institutional holders of the company's debt securities, and it is more fully described in the registration statement on Form S-4 filed with the SEC relating to the proposed exchange offer. Foster Wheeler continues to actively consider such alternatives.

Legal Details

The securities proposed to be exchanged are as follows:

(1) Foster Wheeler's Common Shares and its Series B Convertible Preferred Shares and warrants to purchase Common Shares for any and all outstanding 9.00% Preferred Securities, Series I issued by FW Preferred Capital Trust I (liquidation amount $25 per trust security) and guaranteed by Foster Wheeler Ltd. and Foster Wheeler LLC, including accrued dividends;

(2) Foster Wheeler's Common Shares and Preferred Shares for any and all outstanding 6.50% Convertible Subordinated Notes due 2007 issued by Foster Wheeler Ltd. and guaranteed by Foster Wheeler LLC;

(3) Foster Wheeler's Common Shares and Preferred Shares for any and all outstanding Series 1999 C Bonds and Series 1999 D Bonds (as defined in the Second Amended and Restated Mortgage, Security Agreement, and Indenture of Trust dated as of October 15, 1999 from Village of Robbins, Cook County, Illinois, to SunTrust Bank, Central Florida, National Association, as Trustee); and

(4) Foster Wheeler's Common Shares and Preferred Shares and up to $150,000,000 of Fixed Rate Senior Secured Notes due 2011 of Foster Wheeler LLC guaranteed by Foster Wheeler Ltd. and certain Subsidiary Guarantors for any and all outstanding 6.75% Senior Notes due 2005 of Foster Wheeler LLC guaranteed by Foster Wheeler Ltd. and certain Subsidiary Guarantors; and solicitation of consents to proposed amendments to the indenture relating to the 9.00% Junior Subordinated Deferrable Interest Debentures, Series I of Foster Wheeler LLC, the indenture relating to the 6.50% Convertible Subordinated Notes due 2007 and the indenture relating to the 6.75% Senior Notes due 2005.

As of 5:00 p.m. on September 17, 2004, holders have tendered the following dollar amounts and percentages of the following original securities:

(1) 9.00% Preferred Securities, $100,696,725 (57.5%);

(2) 6.50% Convertible Subordinated Notes, $209,930,000 (99.97%);

(3) Robbins Series C Bonds due 2024, $56,643,071 (73.4%), Robbins Series C Bonds due 2009, $12,028,197 (99.2%), and Robbins Series D Bonds, $35,489,277 based on the balance due at maturity (99.1%); and

(4) 6.75% Senior Notes, $191,118,000 (95.6%).

A copy of the prospectus relating to the New Notes and other related documents may be obtained from the information agent:

Investors and security holders are urged to read the following documents filed with the SEC, as amended from time to time, relating to the proposed exchange offer because they contain important information:

(1) the registration statement on Form S-4 (File No. 333-107054); and

(2) the Schedule TO (File No. 005-79124).

These and any other documents relating to the proposed exchange offer, when they are filed with the SEC, may be obtained free at the SEC's Web site at http://www.sec.gov/or from the information agent as noted above.

The foregoing reference to the exchange offer and any other related transactions shall not constitute an offer to buy or exchange securities or constitute the solicitation of an offer to sell or exchange any securities in Foster Wheeler Ltd. or any of its subsidiaries.

About the Company

Foster Wheeler, Ltd., is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research, plant operation and environmental services.

At June 25, 2004, Foster Wheeler Ltd.'s balance sheet showed an $856,601,000 stockholders' deficit, compared to an 872,440,000 deficit at December 26, 2003.

FOSTER WHEELER: Declares Recalculated Interest Rate for Sr. Notes-----------------------------------------------------------------Foster Wheeler Ltd. (OTCBB:FWLRF) declared the recalculated interest rate applicable to the Fixed Rate Senior Secured Notes due 2011, Series A, to be issued by Foster Wheeler LLC in the equity-for-debt exchange offer that the company launched on June 11, 2004.

If the exchange offer expires as currently scheduled on Sept. 21, 2004, the New Notes will bear interest at a rate of 10.359% per annum. This rate is equal to 6.65% plus the yield on U.S. Treasury notes having a remaining maturity equal to the maturity of the New Notes determined as of 2:00 p.m., New York City time, on the second business day prior to the expiration of the exchange offer. The terms of the New Notes are described in the registration statement on Form S-4 (File No. 333-107054) relating to the exchange offer.

Investors and security holders are urged to read the following documents filed with the SEC, as amended from time to time, relating to the proposed exchange offer because they contain important information:

(1) the registration statement on Form S-4 (File No. 333-107054); and

(2) the Schedule TO (File No. 005-79124).

These and any other documents relating to the proposed exchange offer, when they are filed with the SEC, may be obtained free at the SEC's Web site at http://www.sec.gov/or from the information agent as noted above.

The foregoing reference to the exchange offer and any other related transactions shall not constitute an offer to buy or exchange securities or constitute the solicitation of an offer to sell or exchange any securities in Foster Wheeler Ltd. or any of its subsidiaries.

About the Company

Foster Wheeler, Ltd., is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research, plant operation and environmental services.

At June 25, 2004, Foster Wheeler Ltd.'s balance sheet showed an $856,601,000 stockholders' deficit, compared to an 872,440,000 deficit at December 26, 2003.

Claimant Claim No. Claim Amount Settlement Terms -------- --------- ------------ ---------------- Aerotel, Ltd. 4710 $6,000,000 Aerotel will be deemed to hold an Allowed General Unsecured Claim for $2,000,000, which claim will be treated in accordance with the Plan.

Cendant Mobility 4359 272,683 Cendant will be deemed Services Corp. to hold an Allowed General Unsecured Claim for $268,002, which claim will be treated in accordance with the Plan.

Headquartered in Florham Park, New Jersey, Global Crossing Ltd. -- http://www.globalcrossing.com/-- provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. The Company filed for chapter 11 protection on January 28, 2002 (Bankr. S.D.N.Y. Case No. 02-40188). When the Debtors filed for protection from their creditors, they listed $25,511,000,000 in total assets and $15,467,000,000 in total debts. Global Crossing emerged from chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News, Issue No. 66; Bankruptcy Creditors' Service, Inc., 215/945-7000)

GULFTERRA ENERGY: Moody's Affirms Ba2 Senior Implied Rating-----------------------------------------------------------Moody's Investors Service affirmed the long-term debt ratings of Enterprise Products Operating L.P. (Enterprise, Baa3 senior unsecured) and raised the rating outlook to stable from negative. The ratings of GulfTerra Energy Partners, L.P. remain on review for possible upgrade. Moody's expects to withdraw GulfTerra's ratings after completion of its merger with Enterprise Products Partners L.P. and the completion of Enterprise's tender for GulfTerra's senior and senior subordinated notes, expected in September 2004. Approximately 99.4% of the outstanding GulfTerra notes have been tendered to Enterprise.

The change in Enterprise's outlook reflects improvement in these four areas:

(1) improvement in fundamental operating performance,

(2) reduction in leverage,

(3) improved distribution coverage and

(4) merger integration risk, including GulfTerra debt refinancing.

Enterprise's operating performance, as measured by gross margin of its core operating segments, has improved in the first half of 2004 over the similar 2003 period and has improved in the last twelve months ended June 30, 2004 compared to full year 2003 results. Moody's expects that operating performance will continue to improve in the second half of 2004 and throughout 2005. This improvement principally reflects strengthening in the petrochemical industry, including growing ethylene production and increased demand for ethane and propane. We note that while Enterprise's processing segment second quarter results were negatively impacted by a $15 million loss in its NGL marketing business, the company demonstrated benefits from restructuring its processing contracts, which we expect to contribute to greater gross margins and lower volatility going forward.

Secondly, Enterprise issued 17.25 million common units in August for net proceeds of $341 million, following a similar size issue in April that raised $353 million. Our stable outlook reflects Enterprise's commitment to continue reducing its leverage, including equity issuance from its distribution reinvestment plan -- DRIP.

Thirdly, Moody's expects Enterprise's distribution coverage to continue improving through stronger cash flow and from merger savings as a result of capping the general partner incentive distribution percentage at 25% in the combined company post-merger and the elimination of GulfTerra's general partner incentive distribution percentage of 50%. The 25% cap, currently in place at Enterprise, is expected to result in savings of over $50 million annually compared to the sum of GP distributions currently at Enterprise and GulfTerra separately.

Finally, while merger integration risks remain at the business level, the immediate risk of refinancing GulfTerra's debt has been mitigated by Enterprise closing a $2.25 billion revolving credit facility and expanding the size of its corporate credit facility to $750 million. Our stable outlook reflects Enterprise realizing the diversification and scale benefits of its merger with GulfTerra, meeting or exceeding its target of $40 million in synergy cost savings and effective refinancing of its $2.25 billion bridge facility in the capital markets.

Enterprise's Baa3 rating reflects the company's strong integrated natural gas and NGL assets, its predominantly fee-based and margin-band contract structure, and the impending GulfTerra merger, which should provide additional scale, complementary assets and commodity price risk diversification. Enterprise's rating also considers the volatility of the company's cash flow that is higher than most other MLPs, Enterprise's current leverage and the leverage of the combined company post-merger, management's ability to maintain distribution and capital spending discipline that is consistent with the company's risk profile and cash flow volatility, and merger integration risks including realization of operating and cost saving synergies. Given the rating downgrade in May 2004 and the need for ongoing demonstration of fundamental operating performance improvement, a ratings upgrade in the near to medium term is unlikely. Enterprise's ratings would come under negative pressure from deterioration in the company's operating results, lack of significant progress in leverage reduction, weak distribution coverage, and poor merger integration results.

Enterprise Products Operating L.P., headquartered in Houston, Texas, is the primary operating subsidiary of Enterprise Products Partners L.P. a midstream MLP energy company. The MLP has operations in the transportation, storage and processing of natural gas; the fractionation, transportation, storage and marketing of NGLs and propylene; and the production of MTBE. The assets of the MLP are held in Enterprise Products Operating L.P.

HARVEST NATURAL: S&P Raises Senior Implied Rating to B3 from Caa1-----------------------------------------------------------------Moody's upgraded the senior implied rating for Harvest Natural Resources, Inc., to B3 from Caa1. Moody's also upgraded and removed the notching of the 9.375% senior notes from the senior implied rating, adjusting the rating to B3 from Caa2. The outlook is stable.

The upgrade follows Moody's upgrade of both Venezuela and PDVSA, the national oil company of Venezuela, both of which were downgraded last year pending a resolution to the political instability in the country, which, however, appears to have occurred with the recall referendum completed in August. While Moody's felt that fundamentally Harvest's operations and liquidity were in line with higher ratings at the time, the company's dependency on sales to PDVSA for all of its operating cash flows and with all of its reserves and production located in Venezuela resulted in ratings more in line with Moody's ratings for both PDVSA and Venezuela during this period of uncertainty.

The upgrade and removal of the notching of the notes rating reflects the company's cash balances, which at almost $160 million, is approximately twice the amount of the notes and currently leaving the company with zero net debt as well as management's announcement that it will use the cash to redeem the remaining $85 million of 9.375% senior notes on Nov. 1, 2004. Though the notes are not guaranteed by Harvest's subsidiaries, under the indenture, Harvest must either reinvest the proceeds from the sale of its Geoilbent interest (Harvest received approximately $75 million) in similar type assets or offer to redeem a like amount of notes at par within a year. As a result, Harvest announced it will irrevocably deposit the full redemption amount with the trustee this month to call the notes and gives Moody's cause to remove the notching.

Moody's estimates the redemption will cost approximately $87 million, leaving the company with nearly $70 million of cash, while eliminating about $8 million of annual interest expense and all but approximately $15 million of total debt. According to management, future financings will likely take place closer to the assets and be done out of Venezuela through the Harvest Vinccler, C.A. joint venture.

Harvest's ratings are restrained by:

(i) its concentration of cash flows, which come entirely from production sold to PDVSA and the attendant significant political risk of Venezuela;

The ratings continue to reflect the concentration of the company's cash flows and the political risk associated with operating in Venezuela. Harvest conducts its primary production operations through its 80%-owned Venezuelan subsidiary, Harvest Vinccler, C.A., which possesses a 20-year operating service agreement on mature producing oil reserves with PDVSA that expires in 2012. However, this is the sole source of cash flow for Harvest, and as evidenced during the oil workers strike, is subject to significant political risk.

In September 2003, Harvest exited the Russian market (at least temporarily) when it sold its interest in oil and gas reserves in Russia, through its 34%, non-operating ownership of Geoilbent Ltd, a Russian limited liability company with production and reserves in West Siberia. However, the company has indicated that it will continue to review new opportunities in Russia, which in Moody's view could raise the risk profile of the company.

The ratings also consider that post strike oil production levels have not been fully restored as some of the wells were affected by the strike related shut-in. From the end of the strike through 6/30/04, the company has spent nearly $6 million on workovers to enhance oil production from the affected wells, however, oil production is still approximately 5,000 to 6,000 barrels/day below pre strike levels. Though some of this decline is attributable to the natural decline curve and has been offset by the new natural gas production, some production was affected by the strike related shut-in.

Also restraining Harvest's ratings is its relatively low cash on cash returns. At June 30, 2004, Harvest's full cycle costs per boe of production were $11.60/boe, which includes the company's 3-year all sources finding and development costs. Given the low realizations (approximately 45-55% of WTI) of its heavy grade oil and location and transportation costs, Harvest is only covering its full cycle costs including its 3-year average finding and development costs, at just over 1.0x. Moody's notes that Harvest's costs have improved with addition of the natural gas production, which the company realized synergies with its existing infrastructure, and will further benefit from the reduction of interest expense upon retirement of the senior notes. However, these costs are still high relative to realized prices for its production and therefore, limits the ability to internally fund reserve replacement when commodity prices are lower.

The ratings also consider the high percentage of PUD reserves, which at 12/31/03 was approximately 43% and the associated $104 million of future capital required to convert these reserves to the producing stage.

The ratings gain support from Harvest's significant financial flexibility resulting from cash balances of approximately $160 million that will fund the full redemption of the company's senior notes and leave the company with approximately $70 million of unrestricted cash compared to approximately $15 million of debt at the HVCA level.

The ratings are also supported by Harvest's low leverage as measured by debt/proved developed -- PD -- reserves, which the company has successfully improved from a peak of $5.44/boe for the quarter ended Dec. 31, 2001 to $1.97/boe at June 20, 2004. Upon the redemption of the notes, the company's debt/PD reserves will decline to about $0.30/boe and will continue to benefit from the amortization of a $15.5 million loan at B-V for the construction of a gas pipeline and facility related to the natural gas production agreement with PDVSA. The loan requires quarterly payments of $1.3 million and will be down to approximately $10.3 million by year-end 2004, which barring any new borrowings by Harvest, will be essentially the total debt of the company.

Harvest begun delivering natural gas to PDVSA in November 2003. While the contracted price for the gas is fixed at $1.03 per mcf and calls for 4.5 million barrels of oil at a fixed price of only $7/barrel which is about half of the company's realized price for the rest of the oil production, the company's total production has increased and has provided the company with cost savings and has resulted in a declining lease operating expense and the company being able to cover its cash expenses.

Harvest Natural Resources, Inc., headquartered in Houston, Texas, is an independent energy company engaged in the exploration, development and production of oil and gas in Venezuela.

HEADWATERS INC: Changes Names of Three Major Operating Divisions----------------------------------------------------------------Headwaters Incorporated (NASDAQ: HDWR) is changing the names of three of its main operating divisions to better unify corporate identity.

Headwaters Energy Services will be the new name of Covol Fuels, reflecting the company's growing portfolio of technologies and services for the electric power and energy industries. Energy Services is the leading provider of technology and chemical reagents for the coal-based synthetic fuel industry and has begun the development and commercialization of new coal cleaning and ammonia slip mitigation technologies.

Headwaters Resources will be the new name of ISG Resources, America's largest manager and marketer of coal combustion products, which was acquired by Headwaters in September 2002. Resources manages approximately 20 million tons of coal combustion products annually for many of the nation's largest coal-fueled electric utilities.

Headwaters Construction Materials will be the new name of American Construction Materials -- the Headwaters division that is comprised of several building products manufacturing companies and product brands.

Together with the previously named Headwaters Technology Innovation Group, these four divisions comprise the backbone of Headwaters Incorporated's organization. Headwaters Technology Innovation focuses on development and commercialization of technologies for nanocatalyst creation, heavy oil upgrading, and coal liquefaction and gasification.

The company's product-oriented brand names -- such as Tapco, Eldorado Stone, Southwest Concrete, Palestine Block, Magna Wall stucco, and BEST Masonry, among others -- will be unaffected by the change.

"We anticipate no disruption to product marketing within the Headwaters family of companies, but renaming our top-line business units will help us clarify our corporate identity," said Kirk Benson, chairman and CEO. "Over the past several years, we have successfully acquired a number of leading product brands that will continue in their respective markets. Positioning these brands under a common Headwaters umbrella will help us build recognition of our company as we continue to evolve and grow."

About Headwaters Incorporated

Headwaters Incorporated is a world leader in creating value through innovative advancements in the utilization of natural resources. The company is focused on providing services to energy companies, conversion of fossil fuels into alternative energy products, and adding value to energy. Headwaters generates revenue from managing coal combustion products (CCPs) and from licensing its innovative chemical technology to produce an alternative fuel. Through its CCP business, building products business, and its solid alternative fuels business, the company earns a growing revenue stream that provides the capital needed to expand and acquire synergistic new business opportunities.

* * *

As reported in the Troubled Company Reporter on Sept. 15, 2004, Moody's Investors Service assigned a B1 rating to Headwaters Incorporated's senior secured credit facilities, a B3 rating to its second lien term loan, and a B1 senior implied rating. Headwaters is using the term loans under the credit facilities to finance the $715 million acquisition of Tapco Holdings, Inc., a manufacturer of building products and professional tools used in exterior residential remodeling and construction projects. Tapco reported EBITDA of $63 million in its fiscal year ended October 31, 2003, and is targeting EBITDA of $82 million this year. The rating outlook is stable.

Moody's assigned the following ratings to Headwaters:

(i) B1 rating to its guaranteed senior secured (first lien) credit facilities, which consist of a $75 million five- year revolving credit facility and a $640 million term loan B facility maturing April 30, 2011,

(ii) B3 rating to the $150 million guaranteed second lien eight-year term loan,

(iii) B1 senior implied rating, and

(iv) Caa1 senior unsecured issuer rating.

Moody's ratings for Headwaters exclude, almost entirely, cash flow derived from the company's Covol Fuels synfuels-based business unit due to the uncertainty associated with Section 29 tax credits and their scheduled expiry after 2007. Therefore, Moody's ratings are based on the ability of Headwaters' other businesses to service its pro forma $972 million of debt. In fiscal 2004 (the year ending September 30), these other businesses are expected to account for approximately two-thirds of Headwaters' pro forma EBITDA, or roughly $140 million, which should be adequate to cover interest, capex, and small amounts of debt reduction.

Headwaters' ratings reflect its:

* high leverage,

* relatively few tangible assets (approximately $300 million),

* the challenges of integrating and managing the growth potential of the many diverse businesses that the company has acquired since September 2002, and

* the possibility for further acquisitions.

More specifically, Moody's ratings also consider:

* a high degree of customer concentration at the ISG operations and Tapco,

However, the ratings are supported by the organic growth potential and strong market positions held by ISG and Tapco, the stability of the construction markets they serve, and these businesses' modest capex requirements. Earnings stability is enhanced by ISG's long-term CCP management contracts and by Tapco's low-cost manufacturing capabilities, leading market share for vinyl shutters, and the breadth of its offerings of exterior residential building products. While there are likely to be some synergies between ISG, Tapco, and some of the concrete-based construction materials companies that Headwaters' has recently acquired (such as Eldorado Stone and Southwest Concrete Products), Moody's also takes comfort in the fact that each of these businesses can be run independently.

* the ability of ISG and Tapco to grow with relatively minor fixed asset and working capital investments and, therefore, facilitate debt reduction, and

* Headwaters' reasonably good liquidity, which is comprised of a $75 million revolving credit facility and $35 million of cash.

The ratings could be upgraded if debt is reduced to a level whereby cash flow from all sources other than Covol Fuels indicates sustainable leverage of less than approximately 4x EBITDA or retained cash flow to debt of 15-20% and the earnings power of Headwaters' other businesses remain favorable. If current business plans for Covol Fuels continue without disruption, Headwaters could generate nearly an additional $100 million per year of cash through 2007, which if applied fully to debt reduction would accelerate debt reduction and Headwaters' upgrade potential.

* adverse regulatory changes regarding the use and disposal of CCPs, and

* the emergence of material losses or lawsuits related to Covol Fuels, which has otherwise been excluded from Moody's ratings.

The B1 rating for Headwaters' first lien credit facilities reflects their first priority lien and security interest in all of the company's assets and stock of the borrower and guarantors, and the dominant role of this class of debt in Headwaters' capitalization.

The second lien term loan was rated B3, two notches below the first lien debt, to reflect:

* the modest proportion of loss-absorbing equity in the pro forma capital structure,

* the second priority secured position of the term loan, which ranks behind at least $640 million of outstanding first lien debt (and $715 million of commitments), and

The change in the ratings outlook reflects Henry's success in finally integrating Monsey Bakor, which was acquired in 1998, and the improvement in the company's operating performance in 2003 and thus far in 2004, which Moody's expects to continue.

In addition, the company's key financial ratios now compare favorably with those of other B3 rated building products companies.

The ratings confirmed are:

-- B3 senior implied rating;

-- Caa1 on $58.785 million (remaining balance) of 10% senior notes due 4/15/2008; and

-- Caa2 issuer rating.

The senior notes, originally sized at $85 million, benefit from the upstream guaranties of Henry's domestic operating subsidiaries.

After several years of difficulty with the integration of Monsey Bakor, Henry appointed new senior management and instituted restructuring initiatives in 2001, the significant benefits of which began to be felt in 2003. EBIT coverage of interest expense, which was an unsatisfactory 0.3x in 2001, rose to 1.9x both for 2003 and for the trailing twelve months ended June 30, 2004. Total debt/EBITDA, which was an unhealthy 11.2x in 2001, was sharply reduced to 3.5x for 2003 and to 4.1x for the trailing twelve months ended June 30, 2004 (with the latter period including a seasonal buildup of working capital and short-term debt). Moody's expects this improvement to continue. However, the company still has negative book net worth of $23 million.

As a result of the loss of the Lowe's business and the exclusive arranged with Home Depot, Henry's sales concentration to Home Depot has grown to about 25%. The good news is that Home Depot carries the premium Henry brand while Lowe's, which dropped Henry as a supplier, carried primarily a Henry economy product. In addition, the company reports that Home Depot sells through more Henry product per store than Lowe's had previously done. The potential for bad news is that Home Depot periodically conducts line reviews (Henry's current agreement with Home Depot lasts into 2005), and if it should displace Henry as a supplier, this could have a material adverse effect on the company's ongoing financial health.

Unlike homebuilders, which benefit from dry, mild winter weather, Henry receives a boost from harsh, wet winter weather. The dry winter in the West in 2003 and 2004 kept overall first quarter 2004 revenues essentially flat. In addition, the company is exposed to fluctuations in oil prices, which are translated into changing asphalt costs, and in steel prices, which are used in drums and pails that hold its finished product. Although the company has been raising its prices this year to try to offset its asphalt and steel cost increases, it frequently experiences a lag in the implementation period (for its price increases), thereby pressuring margins.

The company has for many years used chrysotile asbestos in its production process in accordance with OSHA regulations, EPA exemption, and customer acceptance. These asbestos fibers were mixed into and fully encapsulated by the asphalt used in production of Henry's products. Because of the unavailability of asbestos in late 2002 and early 2003, Henry switched to alternate, higher-cost raw materials to maintain production. Even though asbestos is again currently available, the company decided to cease usage of any asbestos in its production process as of September 1, 2004. Henry has been named as a defendant in several hundred suits alleging certain asbestos-related injuries. To date, the company has not incurred any expense in judgment or settlement of any such suit, nor has it experienced any workers' compensation claims related to asbestos exposure despite having used asbestos in the production process since the 1930's. The company believes that its insurance, which has fully covered all litigation related costs to date, is sufficient to cover future costs. However, the company is not covered by insurance for asbestos-related claims pertaining to injuries that are alleged to have arisen after December 1, 1985. With respect to the several hundred suits filed against it to date, the company is not aware of any cases claiming exposure after December 1, 1985. Given the company's small size, a major settlement against it for exposure after 1985 or multiple settlements against it for pre-12/85 exposure that exhausted its insurance coverage would have a material adverse effect on the company's financial viability.

Headquartered in Huntington Park, California, Henry Company is a building products company focusing primarily on products for roofing, sealing, and paving applications. Sales and EBITDA for the trailing twelve-month period ended June 30, 2004 were $228.5 million and $20.8 million, respectively.

IASIS HEALTHCARE: Revises Third Quarter 2004 Earnings Release-------------------------------------------------------------IASIS Healthcare(R) LLC has revised the presentation of the statements of operations and cash flows of IASIS LLC and its predecessor, IASIS Healthcare Corporation, for the three and nine months ended June 30, 2004.

This change in presentation does not alter the results of operations, including adjusted EBITDA and net earnings, of IASIS LLC and IASIS on a combined basis. The loss on early extinguishment of debt of $51.9 million incurred in connection with the acquisition of IASIS, previously reported as an expense of IASIS LLC for the period from June 23, 2004 to June 30, 2004, is now reflected as an expense of IASIS for the period from April 1, 2004 through June 22, 2004.

The change in presentation includes a corresponding $51.9 million increase in unallocated purchase price and member's equity at June 30, 2004. In addition, IASIS LLC has increased its unallocated purchase price of IASIS by $12.6 million reflecting the reduction of the predecessor's net equity carrying value for merger-related expenses. The preliminary purchase price allocation, including unallocated purchase price, is subject to IASIS LLC's obtaining a final valuation prepared by an independent appraiser.

IASIS LLC, located in Franklin, Tennessee, is a leading owner and operator of medium-sized acute care hospitals in high-growth urban and suburban markets. The Company operates its hospitals with a strong community focus by offering and developing healthcare services targeted to the needs of the markets it serves, promoting strong relationships with physicians and working with local managed care plans. IASIS LLC owns or leases 15 acute care hospitals and one behavioral heath hospital with a total of 2,257 beds in service and has total annual net revenue of approximately $1.3 billion. These hospitals are located in five regions: Salt Lake City, UT; Phoenix, AZ; Tampa-St. Petersburg, FL; Las Vegas, NV; and four cities in Texas, including San Antonio. IASIS LLC also has ownership interests in three ambulatory surgery centers and owns and operates a Medicaid managed health plan in Phoenix that serves over 93,000 members. For more information on IASIS LLC, please visit the Company's website at http://www.iasishealthcare.com/

* * *

As reported in the Troubled Company Reporter on May 31, 2004, Standard & Poor's Ratings Services assigned its 'B+' rating and its recovery rating of '3' to IASIS Healthcare LLC's proposed new senior secured bank credit facility.

IASIS Healthcare LLC is a wholly-owned subsidiary of IASIS Healthcare Corp. The facility is rated the same as the company's corporate credit rating; this and the '3' recovery rating mean that lenders are unlikely to realize full recovery of principal in the event of a bankruptcy, though meaningful recovery is likely (50%-80%).

At the same time, Standard & Poor's assigned its 'B-' rating to $475 million senior subordinated notes that are obligations of both IASIS Healthcare LLC, and IASIS Capital Corp. as co-borrowers.

In addition, Standard & Poor's affirmed its 'B+' corporate credit rating on hospital operator IASIS Healthcare Corp., and removed it from CreditWatch where it was placed on May 5, 2004, following the announcement of the proposed acquisition of the company for $1.4 billion by the private equity firm, Texas Pacific Group. As of March 31, 2004, Franklin, Tenn.-based IASIS total debt outstanding was $663 million.

"The outlook is negative, reflecting the potential for a lower rating if the company does not achieve its intended reduction in debt leverage, as this transaction adds about $250 million of debt, and if the company's business policies become more aggressive under new management," said Standard & Poor's credit analyst David Peknay.

INTEGRATED HEALTH: Tort Claimants Want Payment Under IHS Plan-------------------------------------------------------------Before the Petition Date, Dorothy Hileman, Tomas Jimenez-Garcia, Dorothy Custer, Geraldine Escobar, and Jewel Brown, sustained injuries as a result of the Integrated Health Services, Inc. Debtors' negligence and other tort-related claims, including but not necessarily limited to during the year 1999.

Kevin J. Mangan, Esq., at Monzack and Monaco, P.A., in Wilmington, Delaware, relates that under the Plan, the Tort Claimants' claims became Allowed 1999 Insured Tort Claims, as all their claims have been reduced to settlement.

The Plan classifies the 1999 Tort Claimants as Class 8 creditors. The Plan provides that the 1999 Tort Claimants will receive their Pro Rata Share of the total sum of the Available 1999 Insurance Proceeds and 3% of the difference between the 1999 Insurance Proceeds and the total amount of the allowed 1999 Insured Tort Claims. The IHS Debtors were required to deposit cash in escrow in the amount equal to 3% of the 1999 unpaid deductible amount plus any available 1999 Insurance Proceeds due and owing by the IHS Debtors' insurance carriers with respect to the 1999 Tort Claimants.

With respect to the Available 1999 Insurance Proceeds, the Plan provides that the 1999 Tort Claimants will share in any available coverage under the IHS Debtors' 1999 matching deductible professional and general insurance policy issued by Reliance Insurance Company, as provided in the Plan. The 1999 Tort Claimants are deemed to have assigned their rights in a claim filed under the Reliance Policy in the liquidating proceedings pending with respect to Reliance.

The first distribution owed to the 1999 Tort Claimants is a cash payment equal to 50% of the Allowed Claim. Eureka Capital Markets, as the Liquidating Manager of IHS Liquidating, is authorized to make the distributions.

1999 Tort Claimants' Plight

Mr. Mangan tells Judge Walrath that the 1999 Tort Claimants or their family members suffered substantial and devastating injuries resulting many times in death because they or their families entrusted their well being to the IHS Debtors. "[A]t the time when the elderly were most in need, they were abused, mistreated and neglected."

The Claimants and their family members have long ago lost any confidence and trust they ever may have held in the IHS Debtors. Making matters worse, the 1999 Tort Claimants believe that they will never be paid the full value of their claim.

Now, the Tort Claimants are expected to assume that the IHS Debtors, through IHS Liquidating and Eureka, are taking the necessary steps to collect and eventually disburse the funds to them.

Distribution Status

Over the course of a number of months, the 1999 Tort Claimants attempted to determine the expected date of the Initial Class 8 Distribution Date. Communications with the IHS Debtors provided vague and inconsistent information on Eureka's duties, when distributions were to be made, and the reasons for the delay in the distributions.

According to Mr. Mangan, there are no concrete documents or statements are available for the 1999 Tort Claimants to review to track:

(1) the status of the funds available to make the 50% initial distributions to the 1999 Tort Claimants;

(2) the actions taken by Eureka;

(3) the reasons for any delay; and

(4) what the IHS Debtors, IHS Liquidating, or Eureka have done to rectify the cause of the delays.

Without an accounting and status report, the 1999 Tort Claimants are left in a knowledge void as to the status of their claims.

Mr. Mangan notes that the 1999 Tort Claimants' communications with the IHS Debtors and others over the past months on the purported progress towards distribution reveal many general reasons for the delay, including:

-- litigation with Reliance;

-- failure of the excess insurer to disburse funds; and

-- calculation of the claims.

Early this year, the Debtors' counsel advised Camille J. Iurillo, Esq., attorney for Ms. Hileman and Mr. Jimenez-Garcia in St. Petersburg, Florida, that an escrow fund had been established for the excess carriers to place funds in as claims were settled. Funds previously received from Reliance were also deposited in that escrow account. The Debtors' counsel recommended that the 1999 Tort Claimants contact Eureka to be advised of the status and expected date of distributions from IHS Liquidating.

Ms. Iurillo did as told. Andrew Smith of Eureka, however, stated that his company knew nothing about when claims would be paid for the 1999 Tort Claimants. Mr. Smith further advised that he didn't think the 1999 Tort Claimants were receiving any money. Mr. Smith also stated that Eureka was not responsible for the distribution process.

"Eureka's representation is quite shocking in light of the fact that pursuant to the Plan, a liquidating LLC was formed to liquidate, collect and maximize certain assets and to make distributions in respect of certain claims, including the 1999 Claimants' claims," Mr. Mangan says. "Eureka was appointed the Liquidating Manager to accomplish these obligations."

Mr. Mangan also points out that the Liquidating LLC Plan Administration Agreement provides that Eureka is paid $1.2 million a year to accomplish its duties.

Ms. Iurillo again contacted the Debtors' counsel, who advised that, contrary to Mr. Smith's representation, Eureka was responsible for the distributions.

To end this "run around," the 1999 Tort Claimants ask the Court to compel IHS Liquidating and Eureka to make initial distributions to the Class 8 1999 Tort Claims pursuant to the Plan. In the alternative, the 1999 Tort Claimants want IHS Liquidating and Eureka to provide an accounting and status report concerning the distributions owed to the 1999 Tort Claimants.

INTERPOOL INC: Paying Cash Dividend to Common Stockholders---------------------------------------------------------- Interpool, Inc. (IPLI.PK) will pay a cash dividend of $.0625 cents per share for the third quarter of 2004. The dividend will be payable on October 15, 2004 to shareholders of record on Oct. 1, 2004. The aggregate amount of the dividend is expected to be approximately $1,700,000. The amount of the quarterly dividend is based on an indicated annualized dividend rate of 25 cents per share.

Tracing its roots to 1968 and based in Princeton, New Jersey, Interpool, Inc., through its subsidiaries, is the largest lessor of domestic chassis and, in combination with 50% owned subsidiary Container Applications International, is among the largest lessors of marine containers in the world.

* * *

As reported in the Troubled Company Reporter on Sept. 17, 2004, Fitch Ratings has assigned a 'B' rating to Interpool, Inc.'s 6% $150 million unsecured notes due 2014. As part of the offering, note investors have also been issued warrants for approximately 8.3 million shares of common stock exercisable at $18 per share. Interpool's Rating Outlook was revised to Positive from Negative on July 9, 2004. Fitch also rates Interpool's senior secured debt and preferred stock 'BB-' and 'CCC+', respectively.

Fitch views Interpool's successful issuance of unsecured debt as continued positive momentum in the company's recovery from its financial management and operational challenges in 2003. Additional long-term unsecured capital will benefit the company's capital structure and help to provide additional financial flexibility. This offering is a component of a strategy that, over the long term, should simplify Interpool's capital structure and provide additional liquidity resources.

Additional positives include the ongoing implementation of a new accounting and information technology infrastructure, which will likely significantly enhance the company's operational integrity. Interpool has also made significant progress towards returning to a timely SEC filing status by completing its 2003 10-K filing in August. Interpool is expected to become current with its SEC filings before the end of 2004.

The note issuance is pari passu with Interpool's existing $210 million of senior unsecured notes. Partial proceeds from the new issuance will be used to repurchase from the investors in the new notes approximately $49 million of the company's outstanding senior unsecured notes due in 2007. Interpool has indicated that the remaining proceeds will be used for general corporate purposes and to facilitate intermodal equipment fleet growth.

The Positive Rating Outlook reflects Fitch's view that Interpool will continue its progress towards returning to a timely SEC filing status and that, shortly thereafter, the company will seek to re-establish its listing on the New York Stock Exchange. Fitch also believes that, despite the challenges that the company has faced with its accounting, operations, and limited capital markets access, Interpool's liquidity and capitalization remain adequate. This has been a function of management's conservative operating strategy as well as favorable operating conditions in the intermodal equipment leasing market over the past twelve months.

Interpool's remaining challenges focus on the completion of quarterly financial statements for fiscal 2004. However, Interpool has so far been able to meet or exceed its publicly announced filing deadlines for the year. Additional challenges center on refinancing or extending its revolving credit facility within the next ten months to provide additional back-up committed liquidity, and discussions in this regard are currently underway. Interpool must also complete the overhaul and upgrade of its information technology and accounting infrastructure.

ION NETWORKS: Negative Financial Results Raise Going Concern Doubt------------------------------------------------------------------At June 30, 2004 ION Networks, Inc., had an accumulated deficit of $43,958,607 and a working capital deficiency of $193,280. The Company also realized a net loss of $309,061 and $631,869 for the three- and six-month periods ended June 30, 2004, respectively. The Company continues to experience a shortfall in the cash necessary to expand operations. Management and the Board of Directors are exploring various alternatives to secure funding necessary to meet its cash requirements. These factors raise substantial doubt about the entity's ability to continue as a going concern.

Any future operations are dependent upon the Company's ability to obtain additional debt or equity financing, and its ability to generate revenues sufficient to fund its operations. There can be no assurances that the Company will be successful in its attempts to generate positive cash flows or raise sufficient capital essential to its survival. Additionally, even if the Company does raise operating capital, there can be no assurances that the net proceeds will be sufficient enough to enable it to develop its business to a level where it will generate profits and positive cash flows. These matters raise substantial doubt about the Company's ability to continue as a going concern.

About the Company

ION Networks, Inc. designs, develops, manufactures and sells infrastructure security and management products to corporations, service providers and government agencies. The Company's hardware and software products are designed to form a secure auditable portal to protect IT and network infrastructure from internal and external security threats. ION's infrastructure security solution operates in the IP, data center, and telephony environments and is sold by a direct sales force and indirect channel partners mainly throughout North America and Europe.

The outlook revision is solely due to the companies' rating linkage to The AES Corp. (B+/Positive/--), whose corporate credit rating was also affirmed and outlook revised to positive.

The outlook revision on AES reflects a trend of improving credit metrics both at the parent level and on a consolidated basis over the past year, a trend that should continue based on management's public statements regarding its goals for debt reduction and Standard & Poor's expectations of future portfolio performance.

Standard & Poor's expects that AES will maintain or improve its portfolio's cash flow quality and reduce parent level debt to approximately $4.5 billion over the next 18 to 24 months. If this can be accomplished while maintaining its target liquidity of $400 million to $600 million, an upgrade to 'BB-' is likely.

The ratings on IPALCO Enterprises Inc., the parent of Indianapolis Power & Light, reflect the company's linkage to AES. IPALCO was acquired by AES in early 2001. AES is a global power company that owns assets throughout the world.

Standard & Poor's ratings on individual entities in AES reflect AES' consolidated credit quality, which is significantly weaker than that of IPALCO and Indianapolis Power & Light.

* Kennametal's vulnerability to the cyclicality of industrial production that is inherent in its business model,

* its exposure to rising input costs,

* potential for margin compression from any inability to recapture rising costs through higher prices,

* its lack of visibility on order rates, and

* difficulty with divesting businesses that it had targeted for exit.

Among the issues factored into Kennametal's ratings are certain risks associated with its prospective acquisition activity including the potential for meaningful re-leveraging. In recent years, Kennametal's tolerance for significant levels of debt in its capital structure has been demonstrated and in Moody's opinion, the company's moderate size and vulnerability to economic cyclicality warrant a more conservative use of leverage in its capital structure than similarly rated entities. Going forward, the company's use of leverage is expected to be permanently reduced, inclusive of acquisition-related funding. Moody's notes an additional impact of Kennametal's acquisition activity has been the creation of a sizable goodwill asset on its balance sheet, now representing 25% of its total assets, which could be indicative of elevated acquisition multiples and act as a drag on its ability to generate adequate returns on assets (defined as EBIT / total assets).

Nevertheless, Kennametal has generated gross cash flow (defined as, cash from operating activities before working capital) in excess of $130 million in each of the past two years. This level of cash flow has facilitated debt reduction and sustained investment in capex, in addition to regular dividend payments. On and off balance sheet debt (inclusive of securitized receivables) at fiscal year end of $557 million was notably below the $625 million at the prior fiscal year-end, and combined with improved profitability, resulted in a leverage ratio of 2.7 times, down from 3.4 times, respectively.

In Moody's opinion, Kennametal's profitability and cash flows will be further elevated by cyclical economic strengthening and higher rates of industrial production, continuing high levels of demand in Asia, and by its commitment to research and development of higher-margin new products. Cash requirements are expected to be manageable as Kennametal's debt maturity profile is long term and its pension obligations are largely attributed to international plans without funding requirements. Nevertheless, the company anticipates contributing approximately $7 million to its pension fund during fiscal 2005 (end June 30).

Kennametal's liquidity position is adequate based on its access to an unsecured $500 million revolving credit facility (unrated) that contains three financial covenants, one of which restricts maximum leverage to 3.0 times and limits total availability (to $274 million at June 30). Additionally, the company maintains an accounts receivable securitization facility of $125 million that is largely utilized for working capital needs; its cash balance is modest at an average of about $25 million.

Upward pressure may be exerted upon the ratings from:

* Kennametal's permanent deleveraging to conservative levels of 2.0 times or less,

* its ability to use pricing leverage with its customers to pass along raw material inflation, or

* the realization of improved working capital management from visibility into order demand.

Conversely, downward pressure may be applied to the outlook or rating from any transaction that would adversely affect Kennametal's leverage ratio or unduly stress its balance sheet. A leverage ratio of 3.0 times would be likely to exert negative pressure on the outlook and ratings.

Headquartered in Latrobe, Pennsylvania, Kennametal is a global leader in the manufacture, purchase and distribution of a broad range of tools, tooling systems, and solutions to the metalworking, mining, oil and energy industries, and wear-resistant parts for a wide range of industries. For fiscal year end June 30, 2004, Kennametal Inc. reported revenues of $1.97 billion.

MERRILL LYNCH: Fitch Affirms BB Rating After Interest Payment-------------------------------------------------------------Fitch Ratings affirms the $48.5 million class E of Merrill Lynch Mortgage Investors, Inc.'s mortgage pass-through certificates, series 1996-C1, at 'BB' and removes it from Rating Watch Negative. Class E was placed on Rating Watch Negative as a result of interest shortfalls due to the reimbursement of servicing advances. Interest shortfalls are currently being repaid to class E.

As reported in the Troubled Company Reporter on March 29, 2004, Fitch Ratings placed the $48.5 million class E rated 'BB' Rating Watch Negative.

The Rating Watch Negative placement is the result of interest shortfalls incurred by class E as of the March 2004 distribution date. The master servicer, GMAC Commercial Mortgage Corp., is recouping approximately $1.35 million in advances on the West Kentucky Outlet Center, a real estate owned (REO) property. The property was recently re-valued at $750,000.

The Grand Kempinksi Hotel is secured by a 528-unit, full service hotel located in Dallas, Texas. Occupancy, average daily rate, and revenue per available room have all dropped significantly since issuance due to the overall economy and the addition of new supply to the area. As of the year to date ended May 2004, the Fitch-stressed debt service coverage ratio -- DSCR -- on an annualized basis was 0.77 times (x). However, the revenue per available room for YTD May 2004 has shown an improvement of approximately 30% over year-end 2003, primarily as a result of improved occupancy levels. The loan remains current, and the borrower has recently completed a $2.5 million expansion and improvement for the hotel's meeting facilities, which serves as a main draw. Additionally, as of June 2004, a room renovation project began that is expected to be completed in phases over the next few years.

Westgate Mall is a 789,222 square foot regional mall located in Fairview Park, Ohio. Collateral for the loan consists of 225,553 square feet of in-line space, as well as 289,031 sf of anchor space occupied by Dillards North and Kohl's. The loan was transferred to the special servicer in January 2003 because the borrower expressed hardship in meeting the loan's debt service obligations. As of May 2004, the collateral was approximately 70% occupied compared with 89.0% at issuance. The loan is currently delinquent, and the borrower is remitting monthly net cash flow payments under a six-month forbearance agreement.

The third loan of concern, Westshore Mall, is anchored by JC Penney, Sears, Younkers, and Dunham's Sports, which opened at the center in November 2003. Located in Holland Township, Michigan, the mall contains approximately 473,619 sf, of which 393,949 sf serves as collateral for the loan. Excluded from the collateral is an adjacent 79,670 sf Target store. As of March 31, 2004, the in-line occupancy had dropped to approximately 76%, compared with 95% at issuance. Fitch's YE 2003 net cash flow -- NCF -- is down 40% from issuance, and the corresponding Fitch-stressed DSCR is 1.04x.

As of the September 2004 remittance date, the pool has paid down 28.9% due to scheduled amortization and loan payoffs. Additionally, three loans, 605 Third Avenue (22.4%), the Edens and Avant Portfolio (15.4%), and the FGS Portfolio (11.1%), representing 48.9%, have been fully defeased.

Of the remaining three loans in the transaction, one loan has shown significant improvement since issuance. Fashion Mall, representing 11.2% of the pool, saw its Fitch-adjusted YE 2003 -- NCF -- increase approximately 37% from issuance and was 91.8% occupied as of March 31, 2004. The corresponding Fitch DSCR as of YE 2003 was 2.47x as compared with 1.91x at issuance.

The Mansion Grove Apartment's decline in NCF of 8.5% since issuance can be attributed to rental concessions and increased expenses. However, occupancy remains high at 95.8% as of YE 2003. The YE 2003 NCF for the Mark Centers Portfolio is up approximately 4.5% from issuance and has a YE Fitch-stressed DSCR of 1.62x. Of some concern is the drop in occupancy to 85% for the portfolio from 90% at issuance.

NEW VISUAL: Prepares Prospectus on 18.2 Million Common Shares-------------------------------------------------------------New Visual Corporation's recently prepared a prospectus relates to the sale by certain selling stockholders of 18,166,668 shares of Company common stock, par value $0.001.

The selling stockholders may sell the shares from time to time at the prevailing market price or in negotiated transactions.

New Visual will not receive any of the proceeds from the sale of the shares by the selling stockholders.

Each of the selling stockholders may be deemed to be an "underwriter," as such term is defined in the Securities Act of 1933.

About the Company

New Visual is developing advanced transmission technology that allows data to be transmitted across copper telephone wire at speeds that greatly exceed those offered by DSL technology providers. The company will market this pioneering technology to leading chipmakers, equipment makers, and service providers (such as telephone companies), in the telecommunications industry. The Company's technology is designed to dramatically increase the capacity of the copper telephone network, thereby allowing these entities to provide video, data and voice services over the existing copper telecommunications infrastructure, eliminating the need for fiber optic cable to the home or office. The Company's common stock is quoted on the OTC Electronic Bulletin Board under the trading symbol "NVEI".

* * *

Going Concern Doubt

In its Form 10-QSB for the quarterly period ended July 31, 2004, filed with the Securities and Exchange Commission, New Visual Corp. has reported incurred losses in each of its years of operation, negative cash flow and liquidity problems. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability of reported assets or liabilities should the Company be unable to continue as a going concern.

The Company has been able to continue based upon its receipt of funds from the issuance of equity securities and borrowings, including the additional Debentures purchased following the filing of the registration statement in February 2004, and by acquiring assets or paying expenses by issuing stock. In May 2004, the Company raised net proceeds of approximately $218,220 upon the purchase by holders of the Debentures of an aggregate of $250,000 in principal amount of Debentures. In July 2004, the Company entered into a revolving line of credit agreement with Wells Fargo Bank, National Association which allows it to borrow up to $100,000 on a revolving basis until August 10, 2005. The Company's continued existence is dependent upon its continued ability to raise funds through the issuance of its securities or borrowings, and its ability to acquire assets or satisfy liabilities by the issuance of stock. Management's plans in this regard are to obtain other debt and equity financing until profitable operation and positive cash flow are achieved and maintained. There can be no guarantee that financing will be available on commercially acceptable terms, or at all.

NORTHERN KENTUCKY: U.S. Trustee Picks 3-Member Committee--------------------------------------------------------The U.S. Trustee for Region 8 appointed three creditors to serve as an Official Committee of Unsecured Creditors in Northern Kentucky Professional Baseball, LLC's, chapter 11 case:

Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding.

Headquartered in North Bend, Ohio, Northern Kentucky Professional Baseball, LLC, operates a professional baseball club. The company filed for chapter 11 protection on September 3, 2004 (Bankr. E.D. Ky. Case No. 04-22256). John A. Schuh, Esq., at Schuh & Goldberg, LLP, represents the Company in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed $9,353,870 in total assets and $9,485,394 in total debts.

According to Moody's, the ratings are based primarily on the expected loss posed to noteholders relative to the promise of receiving the present value of such payments. Moody's noted that its ratings on each of the combination notes addresses only the ultimate return to the holders of such combination note of the Rated Balance with respect to each such combination note (in the case of the Class P-1 Combination Note, by November 15, 2016). Moody's also analyzed the risk of diminishment of cashflows from the underlying portfolio of corporate debt due to defaults, the characteristics of these assets and the safety of the transaction's structure.

The collateral manager is Octagon Credit Investors, LLC.

OHIO VALLEY: Fitch Shaves Bonds' Rating Two Notches to B+---------------------------------------------------------Fitch Ratings downgrades to 'B+' from 'BB' the rating on $11,730,000 County Commission of Ohio County:

* WV health system refunding and improvement revenue bonds (Ohio Valley Medical Center issue), series 1998A, the $4,085,000 County Commission of Ohio County,

* series 1998B (taxable), and the $16,165,000 County of Belmont, Ohio health system refunding and improvement revenue bonds (East Ohio Regional Hospital issue), series 1998.

The bonds are partially insured by ACA Financial Guaranty Corporation. The Rating Outlook is Stable.

Ohio Valley Health Services and Education Corporation's rating downgrade is due to continued operating losses, upcoming capital needs, and weaker liquidity levels. Operating losses have increased to negative $5.3 million (margin of negative 3.6%) in 2003 from negative $3.1 million (margin of negative 2.4%) in 2002. Ohio Valley Health Services is in the early stages of a $10 million capital plan to replace aged operating rooms at its Ohio facility. The project is being financed with a $5 million bank loan with a 20-year term, $3 million through fundraising efforts, and $2 million from existing bond funds. However, Fitch is unsure that Ohio Valley Health Services will be able to raise the entire fundraising amount for the project. It is also anticipated that the bank loan will be secured by a mortgage pledge, which is not available to existing bondholders.

Further weakening bondholder security, Ohio Valley Health Services has an outstanding line of credit of $2.3 million collateralized by its investment securities. Capital needs at Ohio Valley Health Services are substantial with an average age of plant of 20 years, which is the highest ever recorded by Fitch, and capacity constraints at the Ohio facility. Liquidity is very weak at 32.7 days cash on hand and factoring in the line of credit it would drop to 25.5 days at June 30, 2004. With the additional debt, cash to debt declines to 24.1% during the same period, compared with 26.4% in 2003. MADS coverage, which includes debt service on the new debt, is 0.6 times (x) in 2002 and 1.4x in 2003.

Other risks include the difficult malpractice environment in West Virginia and the unfavorable service area characteristics. Operations were largely affected by a doctors' strike in early 2003 at Ohio Valley Medical Center in West Virginia due to skyrocketing malpractice premiums. Ohio Valley Health Services' malpractice premiums have increased to $4.7 million in 2003 from $1.1 million in 2001, while at the same time its malpractice insurance coverage has been reduced considerably. Tort reform has since then passed, which limits the amount of non-economic damages awarded in a potential lawsuit. However, the flight of physicians out of WV into neighboring Ohio has been significant. The service area characteristics in West Virginia remain unfavorable, with low-income levels, a concentration in steel manufacturing, and high unemployment. Two steel companies in the area have recently emerged from bankruptcy; however, staff downsizing and layoffs have occurred. As a result, bad debt has risen to 6.9% of revenues through the interim six months of 2004 from 5.6% in 2003. Medicaid and self-pay is high at 11.5% and 4.0% in 2003, respectively.

The Stable Outlook is supported by Ohio Valley Health Services' continued strategic focus at its Ohio facility, which has led to improved operations and the implementation of cost-cutting initiatives. Ohio Valley Health Services has downsized services provided by Ohio Valley Medical Center, while concentrating more on the complement of services provided at East Ohio Regional Hospital in Ohio. Income from operations at East Ohio Regional Hospital increased to $1.3 million (operating margin of 2.1%) in 2003 from near breakeven in 2002, compared with a loss of $4.4 million (excludes losses at Peterson Rehabilitation Hospital) at Ohio Valley Medical Center in 2003. Through the interim six months of 2004, operating income for Ohio Valley Health Services' improved to a loss of $373,000 (negative 0.5% operating margin) resulting in MADS coverage of 1.4x. Management believes the performance through the six months is reflective of year-end results for 2004. Ohio Valley Health Services' has been successful in redirecting much of the physician flight to East Ohio Regional Hospital. As a result, patient volume has exhibited strong growth at East Ohio Regional Hospital with discharges, outpatient surgeries, and emergency room visits increasing 15.7%, 7.3%, and 8.9% in 2003, respectively, over the prior year. In addition, Ohio Valley Health Services' has undertaken cost-cutting initiatives such as the sale of Peterson Rehabilitation Hospital in 2003, which lost $714,118 in 2002 and $985,788 in 2003. Furthermore, Ohio Valley Health Services' hired Cardinal Health in 2004 to identify cost-savings opportunities related to labor productivity and utilization, reductions in average length of stay, and supply costs. The initiatives are anticipated to have potential annual savings of $1.4 million.

Ohio Valley Health Services' is a two-hospital system consisting of Ohio Valley Medical Center, located in Wheeling, West Virginia, and East Ohio Regional Medical Center, located in Martins Ferry, Ohio. The system had a combined total of 243 acute-care beds and 94 long-term care beds with total revenues of $148 million in 2003. Ohio Valley Health Services' disclosure to Fitch has historically been adequate and timely. Ohio Valley Health Services covenants to only provide annual disclosure within 150 days after the end of the fiscal year. However, the fiscal 2003 audit was received a month late by Fitch. Audits are made available at nationally recognized municipal securities information repositories. Quarterly disclosure to Fitch includes management discussion and analysis, financial statements (includes balance sheet, income, and cash flow statements), and utilization statistics.

OMNICARE INC: Expands Pharmaceutical Case Management Business -------------------------------------------------------------Omnicare, Inc. (NYSE:OCR), a leading provider of pharmaceutical care, will provide its proprietary pharmaceutical case management services for The Procter & Gamble Company retirees and Unisource Worldwide, Inc., employees and eligible dependents across the United States. Omnicare will recommend and implement pharmaceutical intervention programs to improve health and lower costs for both organizations.

"Providing sustainable, high quality healthcare benefits for employees and retirees is complicated and costly. Omnicare's pharmaceutical care programs for both of these prominent organizations address the dual challenges of managing health risks and rising costs," said Joel F. Gemunder, president and chief executive officer of Omnicare. "Our pharmaceutical case management services are specifically designed to ensure that retirees and other eligible employees receive the highest quality drug therapy at the lowest possible cost. Omnicare takes an active role in both mitigating risk to the health of seniors that some drugs pose and the risk to their health of not taking appropriate medications."

Programs to Improve Quality

The programs being developed by Omnicare for corporate plan members are specifically designed to improve the quality of pharmaceutical care. The U.S. Department of Health and Human Services' Agency for Healthcare Research and Quality recently defined quality as doing the right thing, at the right time, in the right way, for the right person, and having the best possible results. It requires striking the right balance in the provision of health services by avoiding overuse, misuse and underuse. Misuse of prescription drugs is well established as a major cause of preventable death, hospitalization and severe side effects. Overuse of more expensive agents when less expensive, equally safe and effective agents are available wastes valuable healthcare resources. The underuse of proven treatments and resultant gaps in care is an emerging issue that affects both quality and total healthcare costs.

Using a corporation's administrative, medical and prescription claims data, Omnicare is able to identify those most at risk for adverse medication reactions and those whose current drug therapy may be improved. Omnicare then designs patient-specific, therapeutic intervention plans and conducts outreach programs with physicians and other care-givers to implement these plans.

The specific programs that Omnicare will conduct for its new corporate clients are designed to:

-- reduce prescription drug costs of plan members through lower copayments or coinsurance by patient-specific therapeutic interchange to equally safe and effective, but less expensive medications;

-- identify plan members at risk for medication-related problems due to undertreatment of disease states or adverse consequences and therapeutic failures. Examples of these programs include:

1. reducing the use of drugs demonstrated to increase the risks of fractures

2. increasing preventative care of osteoporosis, including pharmacological therapy aimed at preserving or building bone mass, when warranted

3. improving quality of care by managing risks associated with high blood pressure

Improved Pharmaceutical Care Based on Scientific Guidelines

The foundation for all of Omnicare's corporate pharmaceutical case management services is the Omnicare Geriatric Pharmaceutical Care Guidelines(R), a proprietary physician reference tool that was the first formulary developed specifically for improving geriatric drug therapies. Now in its eleventh edition, the Omnicare Guidelines(R) is clinically evaluated and reviewed by the University of the Sciences in Philadelphia, which is a nationally recognized authority on geriatric pharmaceutical care. In addition, it is endorsed by the American Geriatrics Society. The Omnicare Guidelines(R) ranks the clinical effectiveness of drugs and drug classes as "Preferred," "Acceptable" or "Unacceptable" for treatment of nearly 60 diseases and conditions commonly occurring in seniors.

Health Management Not Cost Management

"We are working with Omnicare to implement these programs because Omnicare understands our healthcare issues and has proven clinical expertise in improving the quality of therapy in a cost-effective manner," said J. Michael Rowell, director, compensation and benefits for Unisource. "This effort will help to coordinate pharmaceutical care so that our plan members get the prescriptions they need while protecting them from inappropriate drug therapies. Partnering with Omnicare to develop programs to improve pharmaceutical healthcare safety and effectiveness for our plan members is part of Unisource's effort to find new ways to improve the quality of healthcare as well as manage its cost."

"The key to managing healthcare for plan members is not merely managing the unit cost of pharmaceuticals but, rather, managing their appropriate use," stated Gemunder. "As Omnicare continues to partner with more and more corporations, we hope to see substantial improvements in both health outcomes and costs."

About Omnicare

Omnicare, Inc. -- http://www.omnicare.com/-- a Fortune 500 company based in Covington, Kentucky, is a leading provider of pharmaceutical care for the elderly. Omnicare serves residents in long-term care facilities comprising approximately 1,054,000 beds in 47 states and the District of Columbia, making it the nation's largest provider of professional pharmacy, related consulting and data management services for skilled nursing, assisted living and other institutional healthcare providers. Omnicare also provides clinical research services for the pharmaceutical and biotechnology industries in 29 countries worldwide.

* * *

As reported in the Troubled Company Reporter's May 26, 2004 edition, Standard & Poor's Ratings Services placed its ratings on Omnicare Inc., including the 'BBB-' corporate credit ratings, on CreditWatch with negative implications after the long-term care pharmacy provider disclosed an all-cash offer to purchase competitor NeighborCare Inc.

At the same time, the ratings on NeighborCare, including the 'BB-' corporate credit rating, were also placed on CreditWatch with negative implications, as the pro forma combination is likely to have a markedly weaker financial profile than NeighborCare. The purchase price of $1.5 billion includes the assumption or repayment of a $250 million NeighborCare debt issue. Estimating the effect of additional debt and not assuming any cost savings, total debt to EBITDA is expected to rise to over 4x, while funds from operations to total debt will fall to less than 15%.

"We expect to meet with Omnicare management to determine what cash flow benefits can be realized and the ultimate nature of the financial structure of the combined company before resolving the CreditWatch listing," said Standard & Poor's credit analyst David Lugg.

PACIFIC GAS: Files Gas Accord III Settlement with CPUC------------------------------------------------------On August 27, 2004, Pacific Gas and Electric Company and all other active parties in PG&E's gas transmission and storage 2005 rate case, including The Utility Reform Network and the California Public Utilities Commission Office of Ratepayer Advocates, filed a joint motion with the CPUC seeking approval of a proposed comprehensive settlement agreement. If approved by the CPUC, Dinyar B. Mistry, PG&E's Vice President and Controller, relates in a filing with the Securities and Exchange Commission, the Gas Accord III Settlement will, among other things, set PG&E's gas transmission and storage rates and market structure for a three-year term, commencing January 1, 2005. The Gas Accord III Settlement would maintain the current Gas Accord market structure and service options.

The Gas Accord III Settlement provides a gas transmission and storage revenue requirement of approximately $428,500,000 for 2005 and a 2% per year increase for the following two years. For the year 2006, the revenue requirement would be approximately $436,600,000, and for the year 2007, the revenue requirement would be approximately $444,900,000. The Gas Accord III Settlement also provides that PG&E should file its next gas transmission and storage rate case application no later than February 9, 2007, for rates to be in effect by January 1, 2008.

Comments and reply comments on the joint motion are due in September. A final decision is expected before the end of the year. PG&E and its parent, PG&E Corporation, are unable to predict the ultimate outcome of this proceeding, Mr. Mistry says.

PG&E's Statement

SAN FRANCISCO, California -- August 30, 2004 -- Pacific Gas and Electric Company has reached a three-year agreement on natural gas transportation and storage costs with all active parties involved in the proceedings -- including The Utility Reform Network (TURN), the Office of Ratepayer Advocates (ORA), power plant operators, gas producers and suppliers, business groups representing commercial and industrial gas end-users, independent storage operators and the State of California's Department of General Services.

If approved by the California Public Utilities Commission (CPUC), the Gas Accord III Settlement will set natural gas transportation and storage rates for all customers -- residential and business -- for the next three years, beginning in January 2005 and expiring December 2007. It will continue the Gas Accord market structure for PG&E's gas transmission and storage system, which was first implemented in 1998.

This rate setting proceeding ensures stability and predictability in the gas transmission and storage industry in northern California for the next three years.

"With much uncertainty in the natural gas market throughout the country, a three-year settlement provides economic stability and predictability in gas deliveries through our entire system," said Mike Katz, vice president of PG&E's California Gas Transmission. "For businesses who receive natural gas directly from transmission facilities this agreement will result in significant savings."

If approved, beginning in 2005, all customers would see a decrease in their gas transportation rate. The transportation rate decrease for industrial and electric generation transmission ranges from six to 12 percent. These customers are not on bundled service as they purchase optional storage and backbone services separately. Storage and backbone rates are going up slightly for bundled customers-residential and small commercials- this would mean a slight overall bill increase of less than one- half of one percent for services covered by this settlement for the next three years.

This Gas Accord III Settlement received support from representatives of residential ratepayers and all sectors of the natural gas and electric power industries. By providing suppliers the opportunity to continue existing transmission and storage contracts, the Settlement would also help stabilize the electric market, since natural gas is a primary fuel for electric generation in California.

This proposed Gas Accord III settlement establishes the market structure, rates, and terms and conditions of service for gas transmission and storage under the jurisdiction of the CPUC. It is anticipated that the CPUC may rule on the settlement by mid-December.

PAM CAPITAL: Moody's Affirms Class B Notes' B1 Rating After Review------------------------------------------------------------------Moody's Investors Service confirmed the ratings of two classes of notes issued by PAM Capital Funding LP, which had previously been on watch for downgrade:

(1) the U.S. $1,095,000,000 Class A Floating Rate Senior Secured Notes due May 1, 2010 (currently rated Aa2), and

According to Moody's, its current rating action reflects recent delevering of the Issuer's Class A Notes (by more than $500,000,000 million). However, Moody's noted that certain key attributes of the collateral pool have not shown significant improvement since Moody's placed these notes under review for downgrade. For example, excluding defaulted securities, nearly 40% of the collateral pool has a Moody's rating of Caa1or lower (46% at the time of Moody's watchlist action) and the weighted average rating factor of the collateral pool is 4259 (4413 at the time of the Moody's watchlist action; 2950 limit).

PEGASUS SATTELITE: Wants Exclusive Period Extended Until Nov. 30----------------------------------------------------------------Section 1121(b) of the Bankruptcy Code provides for an initial period of 120 days after the commencement of a Chapter 11 case during which a debtor has the exclusive right to file a plan of reorganization. Section 1121(c)(3) provides that if the debtor files a plan within the 120-day exclusive period, it has an initial period of 180 days after the Petition Date to obtain acceptance of the plan.

In circumstances where the initial 120- and 180-day Exclusive Periods provided for in the Bankruptcy Code prove to be an unrealistic time frame within which the debtor may otherwise be forced to file a plan of reorganization, Section 1121(d) allows the Bankruptcy Court to extend the debtor's exclusive periods:

"On request of a party in interest . . . and after notice and a hearing, the court may for cause reduce or increase the 120-days period or the 180-day period. . . ."

Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in Portland, Maine, tells the United States Bankruptcy Court for the District of Maine that the Pegasus Satellite Communications, Inc. and its debtor-affiliates have taken several key steps towards a successful and consensual resolution of their Chapter 11 cases. The Debtors have:

(1) negotiated and executed a global settlement agreement to settle all litigation with DIRECTV, Inc., and the National Rural Telecommunications Cooperative;

(2) negotiated and executed an asset purchase agreement as part and parcel of the Global Settlement, which provides for the sale of substantially all of their Direct Broadcast Satellite business to DIRECTV; and

(3) engaged in negotiations regarding the sale of substantially all of the assets of Pegasus Broadcast Television, Inc., together with its subsidiaries to Pegasus Communications Corporation, subject to higher and better offers, and to be memorialized in an asset purchase agreement subject to Court approval.

The Debtors' cases are large and complex, Mr. Keach continues. There are 28 debtors in these procedurally consolidated Chapter 11 cases. As of March 31, 2004, the Debtors had assets in excess of $1,600,000,000 and generated net revenues of about $831,200,000 during calendar year 2003.

The Debtors have worked expeditiously to address the critical issues, which have been complex and all consuming to them. Since the Petition Date, the Debtors have been heavily engaged in litigation battling for their very survival. The Debtors have simultaneously dealt with maintaining and retaining a stable work force as well as dealing with all of the business and operational issues that Chapter 11 debtors typically face.

These efforts have culminated in the Global Settlement, which realizes the highest possible value for the DBS business for the benefit of the Debtors and their estates. Without this critical element in place, it would not be possible for the Debtors to contemplate a confirmable Chapter 11 plan.

While the Debtors have made significant progress towards reaching that goal with the execution of the Global Settlement, the Satellite Asset Purchase Agreement and Cooperation Agreement, Mr. Keach asserts that the Debtors still need additional time to propose a confirmable reorganization plan.

Accordingly, the Debtors ask the Court to extend their exclusive period to:

(a) file a reorganization plan until November 30, 2004; and

(b) solicit acceptances of the plan until January 30, 2005.

Mr. Keach explains that the chances of obtaining a consensual reorganization plan will be decidedly increased if the Debtors are allowed the time to carry out their obligations under the Global Settlement, free from the distractions of a competing reorganization plan. Absent an extension, the significant progress the Debtors have made to date would be jeopardized, thereby defeating the very purpose of Section 1121 -- which is to afford a debtor a meaningful and reasonable opportunity to negotiate with creditors and propose and confirm a consensual reorganization plan.

Mr. Keach assures that Court that the extension will not prejudice the legitimate interests of any creditor or equity security holder. The extension will afford the parties the opportunity to pursue to fruition the beneficial objectives of a consensual reorganization plan. The Official Committee of Unsecured Creditors has no objection to the Debtors' request.

PENN OCTANE CORP: SEC Declares Registration Statement Effective---------------------------------------------------------------The Securities and Exchange Commission has declared effective the registration statement on Form 10 filed by Rio Vista with the SEC on Aug. 26, 2004, as amended by Amendment No. 1 thereto filed with the SEC on Sept. 16, 2004 (SEC File No. 000-50394). The registration statement is in connection with Penn Octane Corp.'s (NASDAQ:POCC) proposed spin-off to its common stockholders of the common units of Rio Vista Energy Partners L.P., currently a wholly owned subsidiary of Penn Octane.

Based on current information, the Spin-Off is expected to be completed and the distribution of Rio Vista common units is expected to take place on or about Sept. 30, 2004. Each Penn Octane stockholder will be entitled to receive one Rio Vista common unit for every eight shares of Penn Octane common stock held on that date.

As indicated in the Form 10, the record date for determination of Penn Octane stockholders entitled to receive Rio Vista common units is Sept. 17, 2004. However, under applicable rules of the National Association of Securities Dealers Inc., if any stockholder of Penn Octane on the record date sells shares of Penn Octane common stock after the record date but on or before the distribution date, the buyer of those shares, and not the seller, will become entitled to receive the Rio Vista common units issuable in respect of the shares sold. Accordingly, only stockholders who hold Penn Octane common stock on the distribution date will ultimately be entitled to receive Rio Vista common units. The ex-date on which shares of Penn Octane common stock will begin trading without the right to receive the distribution of Rio Vista common units, and the date on which Rio Vista units will begin regular-way trading on the Nasdaq National Market under the symbol RVEP, is expected to be Oct. 1, 2004, the first business day following the distribution date.

Penn Octane's schedule for completion of the Spin-Off represents its good faith expectation regarding this matter. The completion of the Spin-Off is subject to various conditions that are detailed in the Form 10. The Form 10, including the exhibits that were filed as part of the Form 10, provides greater detail with respect to these conditions. Please refer to the Form 10 filed on Sept. 16, 2004, by Rio Vista and the Form 10-Q/A filed on July 23, 2004, by Penn Octane for more information concerning the Spin-Off.

About Penn Octane Corp.

Penn Octane is a supplier of Liquefied Petroleum Gas (LPG) to Northeastern Mexico. Penn Octane leases a 132-mile, six-inch pipeline which connects from a pipeline in Kleberg County, Texas, to its terminal in Brownsville, Texas, which historically served as a trans-shipment point for truck delivery to Mexico. Until the Spin-Off is consummated, the company will continue to own and operate a 21-mile pipeline which connects the terminal in Brownsville to a storage and distribution terminal in Matamoros, Tamaulipas, Mexico. The company also utilizes a 12-inch propane pipeline which connects certain gas plants in Corpus Christi, Texas, to its pipeline in Kleberg County. The company's network is further enhanced by the 155 miles of pipeline it has rights to use to transport LPG to and from its storage facility of 500,000 barrels in Markham, Texas, that enhances the company's ability to bring LPG to Northeastern Mexico. The company has recently begun operations of its gasoline and diesel fuel reseller business. By allocating portions of certain pipeline and terminal space located in California, Arizona, Nevada and Texas to the company, the company is able to sell gasoline and diesel fuel at rack loading terminals and through bulk and transactional exchanges.

* * *

As reported in the Troubled Company Reporter on August 10, 2004, The auditing firm of Burton, McCumber & Cortez, L.L.P. in Brownsville, Texas, included an explanatory paragraph in Penn Octane Corporation's financial statements as of July 31, 2003, raising substantial doubt about the Company's ability to continue as a going concern.

These facts were previously contained in the firm's Auditors Report to the Board of Directors of Penn Octane Corporation, and dated May 28, 2004.

Ms. Mollison was named Group Publisher, with operating responsibility for the Company's Manufacturing Group, Supply Chain Group and Metals Group. She was formerly Publisher of IndustryWeek magazine and its related media products and services.

The Supply Chain Group includes Logistics Today and Material Handling Management magazines and related online media.

The Metals Group includes Forging, Foundry Management & Technology and Metal Producing & Processing magazines and their related online products.

Ms. Mollison joined Penton in September 1999 as Director of Advertising and Marketing for the IndustryWeek brand. She was named publisher of IndustryWeek in September 2000. Prior to joining Penton, Ms. Mollison worked in various sales and management capacities for Inc., Fortune and AutoWeek magazines. She was an on-air reporter for WKAR radio, an NPR affiliate in East Lansing, MI, and was a sports writer for The Lansing State Journal. She holds a bachelor's degree in journalism from The University of Detroit. Ms. Mollison is based in Penton's Cleveland office.

Mr. Blansfield also was named Group Publisher, and now has senior operating responsibility for the Company's Business Technology and Aviation Groups. He was formerly Group Publisher of the Business Technology Group.

The Business Technology Group includes Business Finance and Business Performance Management magazines and their related event and online media, as well as the internetworld.com Web site and its related Internet Business e-newsletter.

The Aviation Group includes Air Transport World (ATW) and ATW's Airport Equipment & Technology magazines and their related conference and online media properties.

Mr. Blansfield first joined Penton in 1996 as associate publisher of NEWS/400 magazine. He has served as publisher of Business Finance magazine since 1998. Prior to joining Penton, Blansfield was Senior Vice President, advertising, at Thomson Media. Mr. Blansfield earned a bachelor's degree in journalism from Boston University and an MBA in finance from Columbia University's Graduate School of Business. He works from Penton's Darien, CT, office.

Ms. Mollison and Mr. Blansfield report to Penton CEO David Nussbaum.

About Penton Media

Penton Media -- http://www.penton.com/-- is a diversified business-to-business media company that provides high-quality content and integrated marketing solutions to several industry sectors Founded in 1892, the Company produces market-focused magazines, trade shows, conferences and online media, and provides a broad range of custom media and direct marketing solutions for business-to-business customers worldwide.

At June 30, 2004, Penton Media, Inc.'s balance sheet shows a stockholders' deficit of $170,710,000 compared to a deficit of $144,929,000 at December 31, 2003.

PREMIER FARMS: Court Declines to Approve Disclosure Statement-------------------------------------------------------------The Honorable William L. Edmonds of the U.S. Bankruptcy Court for the Northern District of Iowa denied approval of the Disclosure Statement filed by Premier Farms LLC on July 12, 2004. A full-text copy of the deficient Disclosure Statement is available for a fee at:

The Court gave eight reasons for declining to approve the Disclosure Statement:

1) the paragraph regarding financial information found on page 9 of the Statement should be supplemented with a detailed summary of the Debtor's performance from Dec. 8, 2003 up to present with some details on its profits and losses during the five-year period prior to filing;

2) the Disclosure statement failed to specify the fees and expenses incurred to date by the Debtor's accountants;

3) the Disclosure statement should recognize the Debtor's obligation to pay quarterly fees before and after confirmation pursuant to 28 U.S.C. Section 1930(a)(6);

4) the Disclosure Statement failed to identify any potential causes of action under chapter 5 of the Bankruptcy Code like preferences, fraudulent transfers, etc.;

5) the Disclosure Statement contradicts the Plan of Reorganization regarding the leases; the Disclosure states that the Debtor intends to assume all executory contracts while the Plan states that the Debtor intends to reject all executory contracts;

6) the Debtor failed to include the monthly payments in its cash flow projections required under its proposed Plan;

7) the Disclosure Statement failed to explain why the Debtor has fallen behind its payments to postpetition creditors; and proposed payments to administrative claimants should be shown in the Debtor's cash flow projections;

8) the Disclosure Statement does not provide "adequate information" to satisfy 11 U.S.C. Section 1125(a)(1) of the Bankruptcy Code.

Headquartered in Clarion, Iowa, Premier Farms, is a livestock breeder. The Company filed for protection on August 12, 2003 (Bankr. N.D. Iowa Case No. 03-04632). Donald H. Molstad, Esq., in Sioux City, Iowa, represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $22,614,949 in total assets and $93,907,881 in total debts.

SANTA ROSA BAY: Bridge Shutdown Could Affect Fitch's BB- Rating---------------------------------------------------------------The Florida Department of Transportation notified Fitch Ratings that some structural damage has been sustained at the Garcon Point Bridge. The Mid-Bay Bridge is open. Toll revenues from the bridges separately secure the revenue bonds of the Santa Rosa Bay Bridge Authority, Florida and the Mid-Bay Bridge Authority, Florida. The bonds are currently rated 'BB-' (Santa Rosa) and 'BBB+/BBB' (Mid-Bay senior/junior) by Fitch.

Given the damage to infrastructure in the area and the conditions of roads, which include a collapse of Interstate 10 lanes over Escambia Bay and the immediate life-safety focus of emergency services, the Transportation Department has not been able to assess the damage at the Garcon Point Bridge. However, the inherent protections in the Transportation Department's lease-purchase agreement with the Santa Rosa Bay Bridge Authority, the Transportation Department's track record with immediately responding and correcting structural damage, and available property damage and loss of revenue insurance provide considerable protection at the current rating level for the authority's revenue bonds.

Under the lease-purchase agreement, the Transportation Department is responsible for operations, maintenance, and renewal and replacement on the bridges. A few years ago, unexpectedly advanced structural deterioration was detected at the Mid-Bay Bridge. The Transportation Department using its own funds advanced the cost of the repair. Repayment is deeply subordinated and flexible and nonpayment is not an event of default. The Transportation Department has also unilaterally reimbursed the Mid-Bay Bridge for loss of revenue when tolls were voluntarily lifted during and following Hurricane Opal some years ago. The agreement with Santa Rosa Bay Bridge uniquely requires the Transportation Department to reimburse for voluntary toll-free operation. However, the shutdown directly related to the hurricane would likely only be a few days and any related revenue loss relatively small. It is the shutdown due to any potential structural damage that would likely not be covered by the state but instead will depend on insurance recoveries.

The limit of liability for damage to the Garcon Point Bridges is $100 million per occurrence. The business interruption (loss of revenue) coverage limit is $50 million per occurrence. Regardless, FDOT intends to return the facilities to revenue operation at the earliest and seek insurance recovery on a parallel track. Receipt of insurance recoveries is not expected to be a constraint in completion of any required work.

The 'BB-' rating reflects the poor traffic and revenue performance and weak financial profile of the Garcon Point Bridge. It incorporates the protections provided from the large debt service reserve fund that is currently being used to bridge toll revenue shortfalls for debt service. Depending on the extent of damage and the length of time the facility is shutdown, the reserve may be further depleted than expected by Fitch when the bonds were affirmed earlier this year, while insurance recoveries are in process. The reserve, which currently has about $6.3 million, can adequately support fiscal 2005 debt service of $4.9 million and about 25% of fiscal 2006 debt service. Provided that there has not been a total collapse, and the limited information to this point does not indicate that to be the case, the reserve provides considerable protection for repairs to be done. It is important to note that the competing Pensacola Bay Bridge has suffered a partial collapse. Furthermore, while the bridge may be repaired, traffic levels may be suppressed for some time as the service area recovers.

SEPRACOR INC: S&P Junks Planned $500 Mil. Convertible Senior Notes------------------------------------------------------------------Standard & Poor's Ratings Services assigned a 'CCC+' subordinated debt rating to $500 million in proposed zero-coupon convertible senior subordinated notes to be issued by specialty pharmaceutical company Sepracor, Inc. The amount of the notes, which are due 2024, could be increased by $100 million. The first put date is Oct. 15, 2009.

At the same time, Standard & Poor's affirmed its 'B' corporate credit rating on Sepracor.

Although the new notes are senior to the company's existing subordinated debt issues, future senior debt could be added, and this effectively subordinates the new issue in the company's debt structure. Sepracor would use proceeds of the new issue for general corporate purposes, though up to $100 million would be used to purchase shares of company common stock.

Sepracor's pro forma debt balance, including this issue and other recent debt conversion transactions, is projected to be roughly $1.17 billion.

These negative factors are only modestly offset by the growing sales of Sepracor's asthma drug Xopenex, the promise of its insomnia medication Estorra, and the adequate liquidity provided by on-hand cash.

Marlborough, Massachusetts-based Sepracor specializes in the development and marketing of medications to treat respiratory and central nervous system disorders.

SPANTEL COMMS: June Working Capital Deficit Narrows to $1.8 Mil.----------------------------------------------------------------Spantel 2000 S.A., a telecommunications company based in Madrid, Spain is Spantel Communications, Inc.'s operating subsidiary. Spantel 2000 S.A. is a provider of various telecommunications services and products within Spain; all of its operations were established after the deregulation of the telecommunications industry in Spain in 1998. The following comparableanalysis of the Company's operations is based on United States Dollars. This is important because the Company's operations are located in Spain and the value of the Euro, as compared to the United States Dollar, has increased from the prior year. Accordingly, if the following analysis were stated in Euros, the percentage changes would be significantly different.

Revenues for the six months ended June 30, 2004 increased $1,921,080, or 23.58%, to $10,068,610 from $8,147,530 for the six months ended June 30, 2003. This increase was due primarily to the growth of the customer base through an increase in regional coverage, the acquisition of portfolios of telephone clients, and the increased sales of telecommunications services through the implementation of selling campaigns and expansion into related businesses.

Communications expense for the six months ended June 30, 2004 increased $919,400, or 20.08%, to $5,497,537 from $4,578,137 for the six months ended June 30, 2003. This increase was due primarily to the expansion of the Company's business. The gross margin (sales less communications expense) for the six months ended June 30, 2004 increased $1,001,680, or 28.06%, to $4,571,073 from $3,569,393 for the six months ended June 30, 2003. The increase was primarily due to the expansion of business coupled with better pricing as a result of negotiations with major suppliers offset by a decrease in a new business line where the margins are currently lower.

Operating expenses for the six months ended June 30, 2004, increased $899,318, or 31.16%, to $3,785,856 from $2,886,538 for the six months ended June 30, 2003. Expenses consist primarily of marketing and selling, professional fees, and general and administrative costs. This increase is a result of the higher depreciation and amortization expense related to equipment purchased during the prior year and telephone clients purchased, temporary agency expenses to contract people for specific campaigns, and additional general and administrative expenses from higher mailing expenses from an increase in client base.

Net income for the six months ended June 30, 2004 was $636,549 versus $440,367 for the six months ended June 30, 2003. This increase was primarily due to the increase of revenues and the increase of the gross margin.

Plan of Operations

Spantel plans to internally grow its existing customer base through the further implementation of its marketing plan. This marketing plan features a combination of services to build revenues both with existing and new customers. This campaign is designed to enhance customer service and to both entice and hold customer loyalty. Additionally the Company is pursuing the acquisition of similarly situated telecommunications companies, or their clients, primarily in Spain. Such acquisitions of additional customers will improve both revenues and the margins of the new and the existing traffic. These acquisitions will be financed through internal cash flow, if possible, or the raising of additional capital through equity or debt offerings.

The Company has contracted with Uni 2, BT, among others, to purchase telephone time. The contracts are variable by the number of minutes used and the point-to-point destination of the call. Spantel has negotiated better prices and more facilities with these suppliers, therefore it should be able to increase current margins in cost of minutes versus revenue minutes sold.

The Company is going to continue to negotiate with its banks to reduce the current charges and other fees charged.

Liquidity and Capital Resources

The Company's capital resources have been provided primarily by capital contributions from stockholders, stockholders' loans and the exchange of outstanding debt into Company common stock.

As of June 30, 2004, Spantel had a working capital deficit of approximately $1,842,306 versus a working capital deficit of $3,971,682 as of June 30, 2003.

Management believes it will be necessary to continue to improve this working capital position. Continuing to sustain profitable operations and continuing to increase revenues and related margins improves our working capital.

STELCO: Monitor Ernst & Young Files 9th CCAA Restructuring Report-----------------------------------------------------------------Stelco, Inc., (TSX:STE) reported that the Ninth Report of the Monitor, Ernst & Young Inc., in the matter of the Company's Court-supervised restructuring was filed on Friday, September 17, 2004.

The Report provides an update in such areas as financial and operational performance, cash flow forecasts and restructuring measures. A number of these measures were announced by the Company in recent months. The full text of the Report, including a summary of the Company's production and shipping activity during July and August, can be accessed through a link available on Stelco's Web site.

UBS Securities to Assist Fund Raising

The Report references the mandate of UBS Securities Canada Inc., which, as announced in the Eighth Report of the Monitor, has been engaged to provide financial advisory and investment banking services to the Company. The Report states that UBS, in consultation with the Monitor will assist Stelco in conducting a review of all possible alternatives to raise the funds required by Stelco in connection with its restructuring. This would include raising the funds necessary to implement its essential capital expenditure program.

The Report also identifies several matters in which the Company will seek Court approval at a hearing to be held on Friday, September 24, 2004. These matters include the recently concluded agreement for the sale of real property owned by CHT, a Stelco subsidiary.

Stelco Wants Stay Period Extended to November 26

At the same hearing the Company will seek an extension of the StayPeriod, which will otherwise expire on September 30, 2004, to the end of November 26, 2004. The Monitor states in its Report that the extension is necessary for the Company to continue negotiations with various stakeholders in order to develop a plan of arrangement. The Monitor also notes that an extension will provide time for the Company to develop a process for raising capital to address its debts and obligations, as well as to fund its essential capital expenditure program. The Monitor offers its view that the extension requested is appropriate in the circumstances and recommends that the request be granted.

Stelco, Inc., which is currently undergoing CCAA restructuring proceedings, is a large, diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Consolidated net sales in 2003 were $2.7 billion.

"The bank loan rating, which is one notch above the corporate credit rating, and the recovery rating reflect Standard & Poor's expectation of full recovery of principal by lenders in the event of a default or bankruptcy," said Standard & Poor's credit analyst Ben Bubeck. At the same time, Standard & Poor's revised its outlook on the company to stable from negative, and affirmed its 'B+' corporate credit and 'B-' senior subordinated debt ratings.

Proceeds from the proposed term facility will be used to refinance Syniverse's existing bank facility and fund the acquisition of the North America Interoperator Services businesses (IOS NA) of Electronic Data Systems Corporation. This acquisition will further strengthen Syniverse's North American market position in technology interoperability.

The outlook revision largely is based on the revised debt maturity schedule under the proposed new term loan, which substantially reduces Syniverse's amortization payments. The debt maturity schedule under the existing facility had consumed a substantial portion of Syniverse's cash flow and weighed negatively on the ratings. However, Syniverse still is expected to rapidly repay debt under the 75% cash flow sweep provision.

The ratings reflect Syniverse's:

* high debt levels,

* niche position as an independent provider of wireless transaction processing, and

* reliance on growth in roaming transactions in a consolidating wireless telecommunications market.

These partially are offset by Syniverse's recurring revenues and good profitability, which allow for moderate free operating cash flow generation.

TEKNI-PLEX: S&P Pares Credit Rating to B- Due to Expected Loss--------------------------------------------------------------Standard & Poor's Ratings Services lowered its corporate credit rating on Tekni-Plex Inc. to 'B-' from 'B+', and placed the rating on CreditWatch with negative implications. This follows the company's announcement that it expects to report a net loss for the fiscal year ended June 30, 2004, and consequently breached financial covenants under its credit agreement.

Coppell, Texas-based Tekni-Plex had total debt outstanding of about $734 million at March 31, 2004.

"The downgrade reflects significant weakness in the company's operating and financial performance, particularly during the important final quarter of its fiscal year, and constrained liquidity and cash generation," said Standard & Poor's credit analyst Liley Mehta.

The CreditWatch placement reflects heightened concerns about the company's ability to preserve sufficient liquidity in light of weak operating results for fiscal 2004, and deterioration in the company's already stretched and highly leveraged financial profile.

Weaker-than-expected operating results will again contribute to negative free cash flows that underscore the challenges faced by Tekni-Plex with regard to its ability to make meaningful and permanent improvements to its financial profile.

Tekni-Plex's operating performance in 2004 has been adversely impacted by sluggish sales of garden hose products owing to unseasonably cool and wet summer weather in the seasonally peak fourth quarter, and significantly higher raw-material costs, particularly polyvinyl chloride -- PVC -- resins for garden hose products and polystyrene for its food packaging segment. In addition, earnings were adversely affected by lower sales of egg cartons within the food-packaging segment in the first nine months of fiscal 2004. All these factors had an adverse impact on operating profitability and resulted in very high debt leverage.

The company is currently in discussions with its bank group regarding a waiver and amendment to the financial covenants. Tekni-Plex's ability to obtain an amendment to its credit agreement would be key to preserving short-term liquidity and would add support to the 'B-' corporate credit rating. Standard & Poor's will monitor developments and expects to resolve the CreditWatch listing following conclusion of the company's discussion with lenders regarding an amendment to the credit agreement. Standard & Poor's will also evaluate management's ability to improve the company's operating and financial profile, and potential equity infusion from financial sponsors.

Moody's views the company's sources of liquidity as being comprised of its secured lines of credit together with cash on hand. Tembec's credit facility terms and conditions are generally less restrictive than those applicable to many of its peers, however, they are arranged for short terms. Tembec has a good record of being able to roll its credit facilities for successive terms, and difficulties in the periodic roll-over and extension process are not expected. However, should the unexpected occur, and should that coincide with a period of reduced commodity prices and internally generated cash flow, Tembec could potentially find it difficult to fund all obligations from internal sources. In addition to this potential vulnerability, the fact that lines of credit are arranged as discrete facilities in various legal entities may affect the efficient allocation of liquidity, i.e. getting funding to the entity that needs it when it needs it.

To date, this has not been a significant issue for Tembec. However, Moody's generally views situations where liquidity is compartmentalized as being sub-optimal, with the whole being less than the sum of the parts. As well, Moody's does not view the positive mark-to-market value of Tembec's position of forward exchange contracts as augmenting liquidity. In light of these factors, Moody's views the practical liquidity available in support of the above-noted rated entities as somewhat less than the C$455 million that Tembec reported as the June 30th aggregate of unused credit facility availability, cash on hand and the positive mark-to-market value of its forward exchange position. In aggregate however, and in the current context of improved commodity prices and positive FCF, the arrangements provide adequate liquidity.

Moody's considers Tembec's recent financial performance and credit metrics to be weaker than those appropriate for its current Ba3 senior unsecured rating. With the nearly three year commodity price trough and the negative impact of duties on softwood lumber imports to the key United States market, Tembec has not been able to consistently generate sufficient cash flow to cover all of its operating, capital and acquisition activities. The company experienced negative FCF in 2002 and 2003 and Moody's also expects 2004 to show a deficit before positive FCF is recorded in 2005. While softwood pulp, lumber and coated paper prices have increased from cyclical lows, and cash generation is sequentially improving, the pulp market is now experiencing some softness, the lumber market may be vulnerable to a near term retreat from recent highs, and the newsprint market continues to languish. Consequently, there is continued uncertainty concerning the magnitude and sustainability of the commodity price recovery. Presuming the recent pulp price retreat is a pause in the rally and not a permanent impairment, expectations are for sequentially improving cash flow over the next several quarters, implying that Tembec's credit metrics will continue to improve and therefore substantiate the Ba3 rating.

While there are uncertainties concerning the magnitude and sustainability of the ongoing commodity price recovery, a near term return to cyclical lows appears to be very unlikely. However, with Tembec's recent history of extremely poor performance relative to its rating, the company's history of making (primarily) debt financed acquisitions, of not having repaid debt during cyclical upturns, and with the commodity price environment continuing to include a significant proportion of downside versus upside risks, the negative ratings' outlook continues to be warranted.

The outlook could be returned to stable if the downside risks related to commodity prices are addressed. This would see the pulp price rally re-starting, housing starts remaining strong in support of lumber prices, and newsprint prices beginning to show more significant improvement as well. Over time, ratings upgrades are not expected unless Tembec engages in material debt reduction and implements more conservative acquisition and financial policies. Lower ratings could result from either or both of renewed weakness in commodity prices and debt-financed acquisition activity that would cause Moody's to view Through-the-Cycle RCF/Debt as being less than 10% with the commensurate FCF/Debt being less than 5%.

Headquartered in Montreal, Tembec is an integrated manufacturer and distributor of various grades of pulp and paper together with forest products.

TRANSPORTATION TECH: S&P Affirms B Corporate Credit Rating----------------------------------------------------------Standard & Poor's Ratings Services affirmed its ratings on Transportation Technologies Industries Inc., including the 'B' corporate credit rating, and removed them from CreditWatch. The ratings were removed from CreditWatch, where they were placed on May 5, 2004, with positive implications, because of uncertainty surrounding the company's plans for an IPO. The outlook is stable.

At June 30, 2004, the Chicago, Illinois-based casting company had total debt (including the present value of operating leases) of $341 million.

The ratings were previously placed on CreditWatch following [Transportation Technologies'] announcement of plans for an IPO of common stock and the usage of proceeds to reduce debt and redeem preferred stock. However, the company postponed the IPO in August due to unfavorable market conditions. It is now unclear when or if the company will proceed with the IPO. "If the timing of the IPO becomes clearer, Standard & Poor's will review the company's financial performance and prospects for debt reduction at that time," said Standard & Poor's credit analyst Heather Henyon.

The ratings reflect Transportation Technologies' aggressive financial policy and below-average business-risk profile, which are partly offset by its position as a large supplier of metal heavy-duty and medium-duty truck parts and components to the original equipment and after-market segments.

UAL CORP: Settles Diana Brown-Dodson Claim for $5 Million---------------------------------------------------------Diana Brown-Dodson filed Claim No. 41728 against UAL Corp. and its debtor-affiliates, asserting certain workers' compensation rights and remedies. The Debtors objected to Claim No. 41728, arguing that based on their books and records, the Claim was overstated and should be reduced.

During negotiations, the Debtors asked Ms. Brown-Dodson to provide a reasonable estimate of the represent cash value of her Claim, solely to reduce the aggregate liabilities against the Debtors as reflected on the Claims Register and as a means to compromise and settle the Objection.

In a stipulation approved by the Court, the parties agree that a reasonable estimate of the present cash value of Ms. Brown- Dodson's Claim is $5,000,000.

Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. The Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)

UNITED HERITAGE: Substantial Losses Trigger Going Concern Doubt---------------------------------------------------------------United Heritage Corporation is an independent producer of natural gas and crude oil based in Cleburne, Texas. The Company produces from properties it leases in Texas and New Mexico. The Company acquired its Texas property, which includes 114 wells, in February 1997 and its New Mexico property, which includes 294 wells, in June 1999. Its plan has been to develop these properties by reworking many of the existing wells and drilling additional wells, however the Company's revenues from operations, even used in conjunction with loans obtained, do not provide the Company with enough money to implement its business plan.

Auditors Express Doubts

The consolidated financial statements of United Heritage Corporation have been prepared on a going concern basis, which contemplates realization of assets and liquidation of liabilities in the ordinary course of business. The Company has incurred substantial losses from operations and has a working capital deficit. The appropriateness of using the going concern basis is dependent upon the Company's ability to retain existing financing and to achieve profitable operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern.

The Company has raised $1,700,000 in recent months from the private placement of common stock and the issuance of promissory notes, which were converted to common stock during June 2004. Management of the Company continues to explore other methods of financing operations including additional borrowing from a related party financing company, potential joint venture partners and selling portions or all of certain properties and/or subsidiary companies. The Company expects that these actions will allow it to continue and eventually achieve its business plan.

On July 12, 2004, the Company entered into a letter of intent with Imperial Petroleum, Inc. Pursuant to the letter of intent, Jeffrey T. Wilson, President of Imperial Petroleum, Inc. (or his designees), will purchase 13,188,834 shares of Company common stock for a purchase price of $0.75 per share. 7,855,500 of these shares will be purchased, collectively, from the Company's President, Walter G. Mize, and from Christian Heritage Foundation. The remaining shares will be purchased directly from United Heritage Corporation. Subsequent to the stock purchase, Imperial Petroleum, Inc. will be merged into United HeritageCorporation, with each stockholder of Imperial Petroleum, Inc. receiving one share of United Heritage Corporation common stock for three shares of Imperial Petroleum, Inc. common stock. In conjunction with the merger, National Heritage Sales Corporation may be spun-off to stockholders who are of record prior to Mr. Wilson's acquisition of the Company's common stock. There is no guarantee that this merger will take place because the letter of intent states that it is not binding, that the transaction contemplated in it must be approved by the Boards of Directors and the stockholders of each of the signatories and is subject to regulatory, tax and accounting considerations and appropriate investigations by each of the parties.

United Heritage had a working capital deficit of $2,945,932 as of June 30, 2004, an increase of $437,234 as compared to the working capital deficit reported at March 31, 2004 of $2,508,698. Current assets decreased $326,222 during the three-month period ended June 30, 2004 due primarily to expenditures on oil and gas properties of $375,900. Current liabilities increased by $111,012 due to increased accounts payable and accrued expenses resulting from the lack of operating cash flows.

The Company's total assets were $31,694,307 as of June 30, 2004, which is substantially unchanged from total assets of $31,662,597 reported at March 31, 2004.

The Company is engaged in the distribution of meat products primarily on the US west coast through a wholly owned subsidiary, National Heritage Sales Corporation (National).

The Route 440 property, approximately 32 acres, was acquired by a Grace subsidiary in 1981. Unbeknownst to Grace at the time, the Route 440 property was contaminated with approximately 1.5 million tons of chromium waste from a chromium manufacturing facility (owned by a Honeywell predecessor), which had closed in 1954. Grace sued Honeywell in Federal Court in Newark, New Jersey for damages and for an injunction ordering Honeywell to remove the chrome waste and backfill with clean fill.

In May 2003, a Federal Judge decided in favor of Grace. Honeywell has appealed this decision. The settlement will end Grace's involvement in any litigation related to the Route 440 property.

WEST PENN: Operational Progress Spurs Fitch to Affirm B+ Rating---------------------------------------------------------------Fitch affirmed its underlying 'B+' rating and revised its Outlook to Stable from Negative on the approximately $75.6 million Allegheny County Hospital Development Authority Health System revenue bonds, series 2000A (West Penn Allegheny Health System) and the $353.9 million Allegheny County Hospital Development Authority Health System revenue bonds, series 2000B (West Penn Allegheny Health System). The series 2000A bonds are rated 'AAA' based on bond insurance provided by MBIA, whose financial insurer strength is rated 'AAA' by Fitch.

The 'B+' affirmation is based on West Penn Allegheny Health System's operational improvements in fiscal 2004, liquidity ratios given this rating category, and steady market position. Operations improved significantly in fiscal 2004 with an operating loss of just $541,000 versus a loss of $47.245 million in 2003. Excess income was positive in 2004 with the system posting a $19.4 million bottom line. Debt service coverage improved to 1.9 times (x) in 2004 from 1.3x in 2003. West Penn Allegheny's liquidity continues to remain adequate for the rating category at 60 days. Other liquidity measures have remained stable as well, with a cushion ratio at 2.7x and unrestricted cash to debt at almost 30%. West Penn Allegheny's market position is relatively stable in the defined six-county primary service area with a 20% market share but still remains a distant second to UPMC Health System (32.6%), whose bonds are rated 'A' by Fitch.

Fitch believes West Penn Allegheny is beginning to show signs of improved financial performance that should be sustainable. Fitch expects physical plant investment to improve, liquidity to be stable, and debt service coverage to be adequate and stable.

West Penn Allegheny improved its operating results in fiscal 2004 to almost breakeven. The 2005 budget forecasts continued improvement. Excess before interest, taxes, depreciation, and amortization (EBITDA) growth has been solid with EBITDA growing from approximately $96 million (7.9%) in 2003 (including the $25 million from Highmark) to over $135 million in 2004 (10.4%).

West Penn Allegheny's leverage indicators are also a concern with MADS as a percentage of revenues and debt to EBITDA at 5.6% and 4.8%, respectively, through June 30, 2004. Similar to other health systems across the country, West Penn Allegheny has experienced significant increases in expenses, particularly labor, supply, and insurance. Additionally, West Penn Allegheny has a significant accrued pension liability of $131.7 million, although this is down from $152.5 million in 2003. West Penn Allegheny's currently employs approximately 370 physicians. Losses on employed physicians, while declining, remain high at approximately $27.5 million or approximately $74,000 per physician.

The Stable Outlook reflects West Penn Allegheny's financial improvement in 2004 and expectation that fiscal 2005 will continue to improve. Fitch expects liquidity over the near term to be stable due to WPAHS' significant capital needs.

Headquartered in Pittsburgh, Pennsylvania, West Penn Allegheny is a large primary and tertiary health system with six hospitals (1,842 total staffed beds) and other related entities that primarily serve Allegheny County and its five surrounding counties. West Penn Allegheny's flagships are 698-licensed bed Allegheny General Hospital and the 512-licensed bed Western Pennsylvania Hospital. Total revenues in fiscal 2002 were approximately $1.3 billion. Disclosure to Fitch and to bondholders has been provided on a quarterly basis and has been excellent in terms of timeliness and content.

WISE WOOD: Selling Remaining Downhole Services Assets for $850,000------------------------------------------------------------------Fred Moore, President and CEO of Wise Wood Corporation reported the sale of the EnerCore facility, which were the remaining assets of the Company's Downhole Services Division. The transaction involved the sale of the Enercore machinery, equipment and other operating assets for $450,000 and a separate sale of the lands and building located in Stettler, Alberta for an additional $400,000 resulting in an overall price of $850,000 for this facilty.

The Enercore facility was originally purchased by Wise Wood from Enerliner Restorations Inc., in October 2002. This facility provided the installation of polyethylene liners into production tubing with polymer liners for wear and corrosion control. In a continued effort to improve the Company's financial performance and working capital requirements, management concluded that the disposition of the remaining assets of the Downhole division for the purchase price and terms offered by the purchasers was in the Company's best interests at this time.

Wise Wood Corporation provides oil and gas companies with de-coking and de-scaling services through its Joint Venture operations with Innovative Coke Expulsion Inc. In its most recent financial statements dated June 30, 2004 Wise Wood generated revenue of $5.23 million and net income of $0.24 million.

The Company is incorporated under the Alberta Business Corporations Act. The Company became a public company on Dec. 2, 2001, and was then classified as a Capital Pool Company -- CPC -- as defined in Policy 2.4 of the TSX Venture Exchange. Effective with its Qualifying Transaction on May 3, 2002. the Company ceased to be a CPC.

On May 20, 2003 the Company changed its name from Wise Wood Energy Ltd. to Wise Wood Corporation.

* * *

Wise Wood Corporation's June 30, 2004 financial report indicated that Wise Wood incurred substantial losses since its inception and, despite an improvement in cash flows during fiscal 2004, had a substantial working capital deficiency at June 30, 2004 and was in violation of certain of its financial covenants with its banker. The ability of the Company to continue as a going concern is dependent on the success of future operations and the continuing support of its lenders, other creditors and shareholders.

WORLDCOM: New York Times Says MCI Is Looking for Buyers-------------------------------------------------------Andrew Ross Sorkin and Ken Belson, writing for The New York Times, report that MCI is "quietly begun shopping itself to potential buyers," citing executives involved in the sale process as their source.

The unnamed executives tell the reporters that MCI might be sold as a whole or split into parts -- separating business services from consumer services. The target price is $6 billion. Verizon Communications, SBC Communications, BellSouth and Qwest Communications are seen as likely buyers for MCI's corporate services business, as well as Electronic Data Systems and I.B.M. The executives think MCI's consumer business might wind-up in the hands of a private equity firm drawn by the (steadily declining) cash flows. Leucadia has already sought approval from the Federal Trade Commission and the Justice Department to acquire at least half of MCI's common shares. Currently, Leucadia holds about a 5% equity stake.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now known as MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world.

The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc.

-- the Named Plaintiffs and other potential members of the Settlement Class with respect to the same claims asserted in the ERISA Action;

-- the U.S. Department of Labor for possible violations of the fiduciary requirements of ERISA with respect to the 401(k) Plans;

-- a number of former officers, directors and employees for indemnification claims under the Debtors' corporate bylaws and articles of incorporation in connection with the ERISA Action and any losses incurred on account thereof; and

-- Merrill Lynch Trust Company, F.S.B. asserting a contractual claim for indemnification in connection with the claims asserted against Merrill Lynch in the ERISA Action.

The Debtors argued that the claims in the ERISA Action were not meritorious, but even if allowed, the claims would be subject to subordination under Section 510(b) of the Bankruptcy Code. The Named Plaintiffs asserted that the ERISA claims would not be subject to subordination and instead were general unsecured claims. The Named Plaintiffs estimated the amount of the claim for damages in the ERISA Action to be in the range of $150,000,000 to $600,000,000.

The Settlement

The Named Plaintiffs, the Debtors and certain other defendants in the ERISA Action participated in an intense, arm's-length mediation process supervised by Magistrate Judge Michael Dolinger, the District Court-appointed mediator. As a result of the mediation, the Debtors and certain ERISA Defendants negotiated an agreement in principle with the Named Plaintiffs to settle the issues raised in the ERISA Action. The parties document that agreement on July 2, 2004.

The Named Plaintiffs sought a preliminary approval of the Settlement Agreement from the District Court, seeking to certify the Settlement Class as a mandatory non-opt out class. The District Court entered the Preliminary Approval Order on July 21, 2004.

Pursuant to the terms of the Preliminary Approval Order, notices of class certification and claims bar order are to be transmitted to the members of the Settlement Class and other persons and entities by August 6, 2004. The District Court will conduct a fairness hearing on October 15, 2004 at 2:00 p.m. to consider the Settlement Agreement.

* * *

Merrill Lynch Trust Company FSB complains that the ERISA Class Action Settlement Agreement, the proposed Bar Order and related judgment credit formulae proposed by the Settling Parties is improper.

Paul Blankenstein, Esq., at Gibson, Dunn & Crutcher, LLP, in Washington, D.C., tells Judge Gonzalez that the Proposed Bar Order will preclude Merrill Lynch from pursuing any other claim against the Settling Defendants relating to the case. Merrill Lynch will not be able to pursue its separate claim for contractual indemnification against the Debtors, stemming from its agreement to provide directed trustee services to the 401(k) plan.

In January 23, 2003, Merrill Lynch filed Claim No. 28010 against the Debtors. Merrill Lynch seeks to recover damages and expenses in the ERISA Action pursuant to WorldCom's indemnity obligations under a Trust Agreement and a Servicing Agreement, both dated October 10, 1994, between the parties.

Merrill Lynch is a non-settling party with respect to the Settlement Agreement.

Merrill Lunch has filed an objection to the Settlement Agreement before the United States District Court for the Southern District of New York. The District Court is scheduled to conduct a fairness hearing on October 15, 2004, to consider final approval of the Settlement Agreement and rule on Merrill Lynch's objection.

In the Objection, Merrill Lynch points out that the Proposed Bar Order provides that "any judgments entered against" Merrill Lynch will be reduced by the "Judgment Reduction Amount." The Settlement Agreement defines Judgment Reduction Amount as the greatest of:

(a) the $51,150,000 gross amount of the Settlement, less any portion that the District Court determines to have been paid with respect to damages separate from those which the barred person is liable;

(b) the amount of any insurance coverage that the District Court determines would have been available to the barred person but for the Bar Order;

(c) the value of any contribution or equitable indemnification claim the District Court determines the barred person would have been entitled to assert but for the Bar Order, equal to the proportionate shares of liability, if any, of the Settling Defendants; and

(d) the value of any contractual indemnification claim the District Court determines the barred person would have been entitled to assert but for the Bar Order.

The Bar Order and related Judgment Reduction Amount improperly attempt to compromise Merrill Lynch's rights in four ways:

(1) In exchange for being forced to surrender its equitable indemnity and contribution rights, Merrill Lynch is entitled by law to a settlement credit that is equal to the Settling Defendants' proportionate share of the common liability, as in that way Merrill Lynch would pay no more than its equitable share of any judgment. But by conditioning the amount of that credit "in light of the financial capability" of the Settling Defendants to pay, the Settling Parties would establish a regime that might well cause Merrill Lynch to pay more than its fair share;

(2) The Proposed Bar Order and Judgment Reduction Amount commandeer for the benefit of the Settling Defendants Merrill Lynch's contractual right to obtain indemnity from WorldCom. That right exists separate and apart from the allocation of equitable responsibility among liable Parties;

(3) Because Merrill Lynch's contractual right to indemnity falls outside the equitable allocation of culpability among the Defendants, it cannot be subjected to any bar order. The Settling Parties try to skirt the problem by giving Merrill Lynch a judgment reduction credit equal to the value of that contractual indemnification right. But even if the proposed Judgment Reduction Amount is modified so that the indemnification credit is added to the equitable settlement credit, the relief would be insufficient. If Merrill Lynch prevails against the Plaintiffs, there would be no adverse judgment that the contractual indemnification credit could be used to offset. While Merrill Lynch is entitled by its contract to recover from WorldCom the fees and other expenses it incurred in that successful defense, the Proposed Bar Order would deny Merrill Lynch that right; and

(4) The Proposed Bar Order is not mutual. Although the Settling Defendants' proposal would preclude Merrill Lynch from pursuing any claims against them relating to the Class Action, they have reserved the right to sue Merrill Lynch on the very claims that they want barred.

Mr. Blankenstein tells Judge Gonzalez that the Debtors' request do not purport to rule on or affect the determination by the District Court of Merrill Lynch's Objection and do not limit the remedies or orders the District Court might issue in ruling on the Objection. Should the Debtors' request be approved, Mr. Blankenstein suggests that the Bankruptcy Court clarify that Merrill Lynch and other parties are not barred from objecting to the Settlement Agreement and the Proposed Bar Order before the District Court. Approval of the Debtors' request should not restrict or limit the rulings the District Court may issue on the proposed Final Order approving the Settlement Agreement and Merrill Lynch's Objection.

Mr. Blankenstein asks Judge Gonzalez to include this provision in any Bankruptcy Court order approving the Debtors' request:

"Nothing contained herein shall affect, limit, or be construed to affect or limit, (i) the jurisdiction of the District Court over the Settlement Agreement, the Bar Order, and matters and disputes in connection therewith, as set forth in the Settlement Agreement, (ii) the determination and rulings of the District Court on the Final Order, the Settlement Agreement, and on any objections thereto, including the Merrill Objection, or (iii) the granting or withholding of relief or remedies by the District Court in connection with the foregoing."

* * *

Judge Gonzalez approves the terms of the ERISA Settlement Agreement, subject to entry of the Final Order by the U.S. District Court for the Southern District of New York and the occurrence of the Effective Date of the Settlement.

Judge Gonzalez further rules that:

(a) All claims of the Named Plaintiffs and members of the Settlement Class arising under the ERISA Action or otherwise subject to the Settlement are resolved pursuant to the terms of the Settlement Agreement and the Final Order entered by the District Court approving the Settlement Agreement. In the event that the Settlement Agreement is terminated:

(1) The claims will revert to their status as of the day immediately before execution of the Agreement;

(2) The time by which the Debtors may file objections to claims related to the ERISA Action will be extended 75 days from the Effective Termination Date, other than with respect to the claims filed by the Named Plaintiffs; and

(3) The Debtors will file a preliminary objection to the claims of the Named Plaintiffs within 30 days after the Effective Termination Date and a request for a scheduling conference;

(b) Pending Final approval of the Settlement Agreement, the Debtors' deadline to file objections to these parties' claims is extended through and including January 17, 2005:

* Named Plaintiffs,

* Members of the Settlement Class,

* The Non-Settling Parties,

* The U.S. Department of Labor, and

* Any other persons subject to the Bar Order pursuant to the terms of the Settlement Agreement;

(c) If the Settlement Agreement is terminated pursuant to its terms prior to January 17, 2005, the Debtors will file a preliminary objection to the Named Plaintiffs' claims within 30 days after the Effective Termination Date and a request for a scheduling conference;

(d) The Debtors may ask the Bankruptcy Court for further or other extensions of the time to object to any claims; and

(e) Nothing in the Bankruptcy Court Order will affect, limit, or be construed to affect or limit:

(1) the jurisdiction of the District Court over the Settlement Agreement, the Bar Order, and related matters and disputes;

(2) the determination and rulings of the District Court on the Final Order, the Settlement Agreement, and on any objections, including the Merrill Lynch Objection; or

(3) the granting or withholding of protection or remedies by the District Court.

Headquartered in Clinton, Mississippi, WorldCom, Inc., now knownas MCI -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries andmaintaining one of the most expansive IP networks in the world.The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. The Bankruptcy Court confirmed WorldCom's Plan on October 31, 2003, and on April 20, 2004, the company formally emerged from U.S. Chapter 11 protection as MCI, Inc. (Worldcom Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000)

* Saber Partners Appoints Two Attorneys to Advisory Board---------------------------------------------------------Stuart Eizenstat, a former senior official in the Departments of State and Treasury during the Clinton Administration, and Robert W. Gee, the former Chairman of the Public Utility Commission of Texas, have joined the Saber Partners, LLC's Advisory Board. Thomas F. Best, a lawyer with extensive experience representing regulatory agencies in Texas and practicing administrative law, has also joined the firm as Managing Director and General Counsel.

Mr. Eizenstat served as Deputy Treasury Secretary, Under Secretary of State for Economic, Business and Agricultural Affairs and Under Secretary of Commerce for International Trade. He was Ambassador to the European Union from 1993 to 1996.

Currently a partner with the law firm Covington and Burling, Mr. Eizenstat is focused on international business transactions and other international trade-related issues.

Mr. Gee is also a former Assistant Secretary of the U.S. Department of Energy in Policy and International Affairs and Fossil Energy.

"Stuart Eizenstat comes to us with a long and distinguished track record of public service spanning decades," said Joseph S. Fichera, CEO of Saber Partners, LLC. "He is widely recognized for both his integrity and his independence and I have known him personally for over 25 years and always regretted that my business commitments at the time didn't allow me to accept a position working for him while he was at the State Department."

"Bob Gee has worked on regulatory and energy matters from both the state and federal perspective. His dedication, commitment and integrity has permitted him to always find innovative ways for the private sector and government to work in the public interest," Mr. Fichera continued. "We are honored that Stu and Bob have agreed to join our Advisory Board."

Saber Partners' independent advisory board is chaired by Alan S. Blinder, a former Vice Chairman of the Federal Reserve and Member of the President's Council of Economic Advisors.

Mr. Best will oversee legal and research and analysis for Saber Partners and its clients. He replaces Christopher Bosland, who left Saber Partners to accept an appointment by President Bush to be the advisor to the Chairman of the Federal Housing Finance Board.

"Tom Best brings a wealth of regulatory experience to Saber Partners, and his thoughtful approach to problem solving complements his strong legal background," Mr. Fichera said. "We are delighted to have him on our team."

Mr. Best served as Assistant General Counsel for the Texas Public Utility Commission where he represented the State in connection with a wide range of regulatory and financial matters. He also served as the Legal Director of the Commission's Policy Division where he advised commissioners appointed by the Governor on legal and policy matters related to the restructuring of the Texas retail electricity market. Most recently, Mr. Best served as General Counsel for the Texas Commission on Alcohol and Drug Abuse.

"Saber Partners' commitment to the integrity and fairness of markets is evident in the firm's recent work for public sector clients," Mr. Best said. "I am pleased to have the opportunity to work with a firm that has made restoration of the public trust in the capital markets a top priority."

Mr. Best began his legal career representing financial institutions in negotiations and conducting litigation concerning accounting rules and regulation. After working as an attorney for the Texas State Senate, he established a successful private legal practice in Austin, Texas representing a variety of private sector clients concerning their interaction with state government.

Saber Partners, LLC -- http://www.saberpartners.com/-- is a full- service financial advisory firm providing strategic support to a broad range of corporate and public sector clients.

Since the firm's creation in September 2000, Saber Partners has set itself apart as an innovator in the realm of banking and finance. The firm is known for taking bold action and achieving significant results on behalf of a roster of clients that includes ExxonMobil Corporation, the Office of the Governor of the State of California, the Public Utility Commission of Texas, the Board of Public Utilities of New Jersey and an agent of the State of Vermont, as well as for other corporations interested in financings, mergers or acquisitions.

Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities.Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report.

Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test.

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